–SA Unemployment: -68k (pan), -43k (west), -25k (east)

MNI survey median: -10,000 m/m
MNI survey range: -20,000 to +5,000 m/m

FRANKFURT (MNI) – The German labour market once again beat all
expectations, as 68,000 workers left the ranks of the unemployed,
pushing the seasonally adjusted jobless rate down to 7.8% in April, the
Federal Labour Agency reported on Thursday.

The decline in the number of jobless left the total number of
unemployed at 3.285 million.

In non-seasonally adjusted terms, the unemployment rate fell to
8.1% from March’s 8.5% level, reflecting a reduction in the number of
jobless to 3.406 million from 3.568 million.

Payroll jobs, which lag unemployment figures by one month,
increased by 10,000, more than fully reversing February’s dip, while job
vacancies in April rose by 8,000, mirroring the previous month’s result.

In a speech given in New York earlier this week, Bundesbank
President Axel Weber noted the robustness of the German labour market
during the crisis. “As a consequence, consumption activity is this time
comparatively stable, therefore supporting the economic growth process,”
he said.

Households polled in the latest GfK consumer sentiment survey also
highlighted the positive outlook for the labour market, resulting in
upward reassessments both of the economy and their own income
expectations.

However, some forecasts suggest that the resilience of employment
figures will eventually come to an end.

The International Monetary Fund has projected that the German
jobless rate will reach 8.6% this year before jumping as high as 9.3% in
2011.

Forecasts from the IAB, the research arm of the Federal Labour
Agency, point to the number of unemployed hitting an average of 3.5
million, while IAB head Frank-Juergen Weise told Market News
International last month that this figure could be even higher.

Still, sentiment indicators appear more optimistic.

Citing firms in the manufacturing and services sectors, the
purchasing managers index (PMI) report noted that although job creation
remains below pre-crisis levels, overall job growth increased at its
highest rate in almost two years. In the manufacturing sector alone,
staff levels increased for the first time since September 2008.

The Ifo institute’s business climate report echoed the PMI, with
manufacturers canvassed expecting to reduce the rate of staff cuts yet
again in April, and service providers looking to increase their staff
levels.

–Frankfurt bureau: +49-69-720 142, email: frankfurt@marketnews.com

[TOPICS: M$G$$$,MAGDS$,M$X$$$,M$XDS$,MT$$$$]