German labor market shaky

In absolute figures, the number of Germans without work last month dropped by 35,000 to 2.75 million compared with the month of September, according to latest jobless figures released by the German Labor Agency (BA) Tuesday.

But compared with October 2011, the absolute figure was by about 16,000 unemployed higher, the agency noted, which marked the first time since February 2010 that a year-on-year jobless figure had changed for the worse.

In a further sign that the German jobs miracle of the past three years might come to an end, the BA's seasonally-adjusted jobless figure actually rose by 20,000 in October to reach 2.94 million.

Hiring in Germany normally rebounded strongly every October, the agency explained the decline, but last month the creation of new jobs was weaker than usual for the month.

"The weaker economic outlook is making itself felt on the labor market," said Labor Agency Chief Frank-Jürgen Weise, adding, however, that the labor market was still looking robust.

German economists had forecast seasonally-adjusted unemployment to rise slower at a rate of 10,000 jobless more in October. They now believe the German labor market will remain flat for the rest of the year.

Berenberg Bank analyst Christian Schulz described the monthly unemployment figure as the worst since the 2007 financial crisis. He told the Reuters news agency that he expected unemployment to fall not before the economy would rebound, possibly in the first half of 2013.

However, Stephan Rieke, economist with BHF Bank, told the same news agency that the labor market was strong enough to overcome the brief dent in economic growth expected in Germany for the rest of 2012.

uhe/jr (dpa, AFP, Reuters)