German unemployment fell for a 13th month running to a six-year low in April, bolstering hopes a labour market revival can spur the consumer spending that accounts for almost two-thirds of Europe's biggest economy. The seasonally-adjusted jobless total fell by 9,000 on the month to 3.845 million, the lowest since June 2001, the Federal Labour Office said.
The adjusted unemployment rate held at 9.2 percent of the workforce, it added. The decline was smaller than the 40,000 expected by economists, but this was attributed to a seasonal effect linked to the unusually mild winter.
"This is great news for stronger consumer confidence, stronger consumer demand and stronger sustainable growth," said David Brown, chief European economist at Bear Stearns in London. "High unemployment and weak consumer demand have been the weak links of the German economy over the last decade, but this should all be in the past now," he added.
The headline unadjusted jobless total provided a further boost for Germany's ruling coalition, dipping below the psychologically important 4 million level for only the second month since October 2002. "The economic upswing is still offering powerful support to the labour market," Labour Office head Frank-Juergen Weise said, adding that he expected an average headline unemployment total of 3.8 to 3.9 million this year.
German unemployment hit a post-war high above 5 million in early 2005 but has since fallen steadily, helped by economic growth of 2.7 percent last year, the strongest in six years.
Analysts say the economy has weathered January 1's three-point hike in sales tax to 19 percent better than expected. Wolfgang Franz, a member of the government's panel of economic advisers, told German radio on Wednesday he expected expansion this year of around 2.5 percent.
Federal Statistics Office data published earlier on Wednesday showed the number of Germans in work rose to a new post-reunification record of 39.429 million in March. The employment data lag the jobless figures by one month.
In further positive news on the labour market, a survey of manufacturers showed firms in the sector continued to add jobs in April, with investment goods makers reporting a particularly sharp increase in staffing levels.
"We're seeing a well-rounded economic picture with a self-supporting upturn," said Joerg Lueschow at WestLB. An unusually mild winter meant the monthly decline in the adjusted jobless total was smaller than in previous months in April, the Labour Office said in a statement.
"Because less seasonal unemployment built up (over the winter), there is less unemployment to decline over the spring," it said, adding that averaged out over the winter and spring, the adjusted jobless total had fallen by 77,000 on the month since November.