German jobless falls

The number of unemployed in Germany fell by more than expected in January, official figures showed on Wednesday in a sign the economy made a solid start to 2007 despite the impact of a sales tax hike. The unemployment total fell by 106,000 on the month in seasonally adjusted terms to 3.976 million, Federal Labour Office figures showed.
A Reuters poll of economists had pointed to a decline of 35,000 on the month. The headline unadjusted total rose to 4.247 million from 4.008 million, for a rate of 10.2 percent, up from 9.6 percent in December.
The upbeat tone to the jobless figures chimed with a report showing German retail sales rose almost twice as much as expected in December, jumping 2.4 percent on the month in real and seasonally adjusted terms ahead of January 1's sales tax hike.
A wider measure published by the Bundesbank that includes sales of vehicles and turnover at petrol stations showed a monthly gain of 4.4 percent.
Germany's ruling coalition raised value-added tax (VAT) by three percentage points to 19 percent at the start of the year in a move analysts predicted would boost sales at the end of 2006 but crimp spending in the first quarter of 2007. Europe's biggest economy expanded by 2.5 percent in 2006, the best performance in six years.
RETAIL SALES JUMP: German retail sales rose almost twice as much as expected in December, helped by a surge in sales of household goods, building materials and clothing ahead of January 1's hike in sales tax, data showed on Wednesday. Retail turnover jumped 2.4 percent on the month in real and seasonally adjusted terms, according to preliminary Federal Statistics Office figures, beating the mid-range forecast in a Reuters poll for a gain of 1.3 percent.
The data exclude sales of vehicles and turnover at petrol stations and are based on figures from six German states accounting for some 74 percent of total sales. A wider measure from the Bundesbank that includes vehicles and gas stations showed a monthly gain of 4.4 percent for December, reflecting a surge in auto sales late last year.
A Reuters calculation showed retail sales according to the Federal Statistics Office figures were down 0.3 percent on the quarter in the final three months of the year compared with the July-September period. However, according to the Bundesbank measure, sales were up 1.4 percent on the quarter.