German unemployment hits new low in January

FRANKFURT AM MAIN: Unemployment in Germany hit a new low in January, official figures showed on Wednesday, as Europe's largest economy made a strong start to the year while Berlin inches towards forming a government.

Just 5.4 percent of workers were jobless this month, the federal employment agency (BA) said in figures adjusted for seasonal and calendar variations, down from 5.5 percent in December. The January figure was the lowest since reunification in 1990 and in line with analysts' expectations.

"The labour market entered the new year with a lot of momentum," BA chief Detlef Scheele said in a statement.

In unadjusted terms -- less representative of underlying trends but closely followed in public debate -- the jobless rate increased 0.5 percentage point to 5.8 percent and the jobless total increased by 185,000 to 2.57 million.

"The number of jobless people did rise, but it was less than usual at this time of year," Scheele noted.

High demand for German goods abroad, strong domestic demand powered by consumers and supportive policies from the European Central Bank have bolstered the recovery in Europe's largest economy. And surveys of consumer, business and investor confidence are positive, even as Chancellor Angela Merkel's bid to assemble a governing coalition drags on in the wake of September elections.

The strong economic picture has encouraged metalworkers to demand big concessions from bosses in wage talks, with union IG Metall insisting on a 6.0-percent wage rise and the right to switch temporarily to part-time hours.

Thousands of workers are participating in 24-hour "warning strikes" this week to raise the pressure on employers.

Other unions could be encouraged to follow suit in an economy where skilled workers are increasingly hard to come by.

Meanwhile, BA figures also showed that the large numbers of migrants and refugees that have arrived in Germany helped boost the count of so-called "underemployed" people to 7.7 percent, up 0.3 percentage point.

On top of the main jobless figure, the underemployed tally includes groups like the temporarily sick or people in government-subsidised jobs or training.

So far, many refugees have yet to show up in the headline unemployment figure as they are still enrolled in integration or language courses.