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German unemployment in surprise fall | |
(about 4 hours later) | |
Unemployment in Germany fell this month, confounding predictions of a slight rise. | Unemployment in Germany fell this month, confounding predictions of a slight rise. |
The number of people registered as unemployed in Germany fell by 22,000 to 2.89 million in October, the Federal Labour Office said. | |
The figures were adjusted for seasonal variations. The small decline means the unemployment rate holds steady at 6.7%. | The figures were adjusted for seasonal variations. The small decline means the unemployment rate holds steady at 6.7%. |
The data is a ray of light among recent signs of economic stagnation in the eurozone. | The data is a ray of light among recent signs of economic stagnation in the eurozone. |
Higher employment, moderate inflation and rising wages are helping to prop up domestic demand in Germany. | |
It is hoped these factors will help the government in its plan for growth this year and help compensate for weak exports, the previous driver of growth. | |
Data on industry orders, output and exports show them falling at their steepest rate since 2009. | |
Deflation fears | |
Data earlier in the week showed German exports to Russia fell more than 26% in August, compared with a year earlier. | Data earlier in the week showed German exports to Russia fell more than 26% in August, compared with a year earlier. |
"The German labour market remains solid as a rock, defying all woes from a weakening industry," said Carsten Brzeski, senior economist at ING. | "The German labour market remains solid as a rock, defying all woes from a weakening industry," said Carsten Brzeski, senior economist at ING. |
Preliminary data also showed that German inflation fell to an annual rate of 0.7% in October. The cost of living was down by 0.3% compared with a month earlier. | |
"A single month of falling prices is not really a problem - the worry is whether it might be the start of a longer period of deflation for Germany and the eurozone which could aggravate the region's economic problems," said BBC World Service economics correspondent Andrew Walker. | |
In Spain, official figures showed consumer prices fell 0.1% in October - the fourth consecutive month of declines - reflecting weak demand for goods and services. | |
There is already concern that the eurozone faces the risk of deflation. | There is already concern that the eurozone faces the risk of deflation. |
Other figures showed that Spain's economy expanded for the fifth quarter running in the three months to September, with gross domestic product rising 0.5%. |
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