German unemployment unexpectedly declined in January for the first time in 10 months, adding to signs that Europe’s largest economy is gathering pace.
The number of people out of work fell a seasonally adjusted 16,000 to 2.92 million, the Nuremberg-based Federal Labor Agency said today. Economists had predicted an increase of 8,000, the median of 31 estimates in a Bloomberg News survey showed. The adjusted jobless rate dropped to 6.8 percent, matching a two- decade low.
The Bundesbank said last week the economy appears to be recovering from its fourth-quarter slump, when gross domestic product may have dropped as much as 0.5 percent. Confidence among entrepreneurs and investors rose more than economists estimated in January and a gauge of activity in service industries climbed to a 19-month high.
“The German labor market is in a good position,” said Anatoli Annenkov, an economist at Societe Generale in London. “Wages are fairly robust and inflation is coming down. Real income is growing and domestic demand may help the economy to expand again in the first quarter of this year.”
German small- and medium-sized companies plan to add employees this year even as most of them expect the economy to stagnate, a poll of more than 3,000 businesses by the BVMW lobby of medium-sized firms showed last month.