Improving forecast

The German labor market took a more positive turn than is usually expected for the time of year as unemployment dropped in March, the Federal Labor Agency said Thursday.

The jobless rate fell to an unadjusted 7.6 percent as the number of people out of work dropped to 3.21 million. That equates to around 102,000 fewer job seekers. The rate had stood at an unadjusted 7.9 percent in February.

When adjusted for seasonal effects, the rate in March was recorded as 7.1 percent, down from an adjusted 7.3 percent the month prior.

The new figures marked the third consecutive month the jobless rate has dropped. In year-on-year terms, the number of people registered as unemployed fell by 350,000.

"The economic recovery is allowing unemployment to keep falling," said labor agency chief Frank-Jürgen Weise, adding that demand for workers remained high.

Consumption defies jobs rate

Meanwhile, German retail figures for February released Thursday failed to maintain the highs of the previous month, but nonetheless were up on the same period last year.

Retail sales gained an annualized 1.1 percent last month, according to provisional price-adjusted data, but fell by 0.3 percent from January thanks to a drop in consumer sentiment.

"It may be that higher gasoline prices are now starting to bite, though today's figure certainly does not provide enough evidence to draw such a conclusion yet," Goldman Sachs economist Dirk Schumacher told the news agency AFP.

The Destasis statistics agency said the month-on-month decline in February was caused by a 2-percent drop in sales of foods, drinks and tobacco.

Sales figures were calculated using data from seven of Germany's 16 states accounting for 76 percent of all sales.

Author: Darren Mara (AP, AFP, dpa)
Editor: Rob Turner