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Business

German unemployment at lowest level in nearly two decades

German workers continue to benefit from an upswing in growth, as the number of those without a job dropped again in November, while across the eurozone, unemployment inched up.

A factory worker

German exporters are powering growth and jobs

Germany is bucking the trend in Europe, as the number of jobless in the country dropped by 14,000 compared to October and 284,000 compared to the same month in 2009.

There are now 2.93 million people out of work in Germany, the lowest figure since 1991. The unemployment rate remained steady at seven percent. In the former East, it stands at 10.7 percent, in western Germany it is at six percent.

"The labor market is profiting from the strong economy," Frank Weise, chairman of the German Federal Labor Office said on Tuesday.

While the coming months might see another rise in unemployment due to the winter weather, experts agree that it will just be a seasonal blip.

"The labor market is on fire," Unicredit economist Andreas Rees told the news agency Reuters. He pointed out that many jobs are being created by temp agencies at the moment, but that he expected more vacancies for long-term jobs in the near future.

Shopping center in Frankfurt

Shoppers have flocked to the shops at the start of the holiday season

Bucking the trend

With its robust growth, Germany is once again the powerhouse of Europe. The European Commission forecast growth of 2.2 percent in 2011 for Europe's biggest economy and 3.7 percent for 2010.

The closely-watched IFO business sentiment index reached its highest level since reunification in November, reflecting an upbeat mood among German firms. Retailers have also reported a strong start to the holiday shopping season, indicating that traditionally cautious German consumers are willing to spend.

Meanwhile, unemployment in the whole of the eurozone rose by 80,000 to just under 16 million people in October, the latest data available. The unemployment rate stands at 10.1 percent, with Spain, Greece and Italy particularly hard hit.

Germany's Federal Labor Agency predicts a drop in the number of people out of work to 2.7 million during 2011.

Author: Nicole Goebel (Reuters, dpa)
Editor: Chuck Penfold

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