German unemployment fell to a new record low as Europe’s largest economy continued to power ahead.
The jobless rate dropped to 5.7 percent in May from 5.8 percent, data from the Federal Labor Agency in Nuremberg showed on Wednesday. The number of people out of work slid by a seasonally adjusted 9,000 in May to 2.54 million, compared with a decline of 15,000 forecast in a Bloomberg survey.
Germany’s economy expanded 0.6 percent in the first quarter on the back of strong domestic demand and firming global trade. The Bundesbank expects the upswing to continue in the coming months, bolstering employment and private spending.
“In line with good economic conditions, the labor market continues to develop favorably,” labor agency head Detlef Scheele said in a statement. “The number of jobless people extended its decline in May and employment once again grew at a robust pace. Demand for labor also continues to be at very high levels.”
The European Central Bank is counting on low unemployment in Germany to start pushing wages higher — a key element to restoring sustainable inflation in the euro area.