German unemployment drops in July
Published 29/07/2010 | 12:44
German unemployment fell for a 13th month in July as companies from Infineon Technologies to Deutsche Lufthansa benefit from the strengthening global economy.
The number of people out of work declined a seasonally adjusted 20,000 to 3.21 million, the Federal Labour Agency in Nuremberg said today.
That’s the lowest since November 2008. Unemployment was forecast to fall 20,000, according to the median of 34 estimates in a Bloomberg News survey. The adjusted jobless rate declined to 7.6pc.
The drop in joblessness comes on the same day that German companies from Siemens AG to BASF SE reported earnings that outstripped estimates, adding to data for July showing services and manufacturing industries accelerated as business confidence surged to a three-year high.
That all points to Germany’s export-driven economy gathering pace as improving global demand outweighs spending cuts by European states trying to lower debt.
“As the world economy recovers and foreign demand grows, Germany’s export industry is among the winners,” said Stefan Hardege, an economist at the Berlin-based DIHK chamber of industry and commerce, which represents 3.6 million companies.
“We’ve seen a favourable development in the labour market and we assume this will continue.”
Munich-based Siemens, Europe’s largest engineering company, raised its full-year profit outlook today after quarterly income rose 40pc, beating analysts’ estimates.
BASF of Ludwigshafen, the world’s biggest chemical company, cited a rebound in demand for second-quarter profit that topped estimates.
Cologne-based Lufthansa, the second-biggest airline in Europe, tripled its quarterly operating profit on a recovery in demand for travel and freight transport.
Infineon Technologies raised its full-year forecast yesterday, with Chief Executive Officer Peter Bauer saying that Europe’s second-largest chipmaker is “executing extremely well in the current up-cycle.”
The Ifo business-confidence index unexpectedly jumped to 106.2 this month from 101.8 in June, the biggest monthly increase since records for a reunified Germany began in 1990.
Economy Minister Rainer Bruederle sees the economy growing 2pc this year, outstripping the government’s 1.4pc projection, Focus magazine reported on July 24.
The improving labour market is also lifting consumer sentiment, which may bolster spending. GfK AG’s monthly index of household confidence will rise to a nine-month high in August, the Nuremberg-based market-research company said July 27.
“The pace of expansion noticeably improved in spring,” the Bundesbank said in its monthly report on July 19. The “remarkable” improvement in the labor market bodes well for “a gradual stabilization of private consumption.”
Shortages of skilled workers are starting to reappear. Labour demand rose in July, led by temporary-work companies, retailers, construction and the food and drinks industry, the labour agency said in a report yesterday.
Daimler AG, the world’s second-largest maker of luxury cars, has hired 1,800 temporary workers and added Saturday shifts at some plants.
According to Organisation for Economic Cooperation and Development data, Germany’s jobless rate was 7 percent in May. The equivalent rate in France was 9.9 percent and the U.S. rate was 9.7 percent.