INDONESIA HOTLINE

The number of Germans out of work sank below 3 million in October for the first time in two years, illustrating the impressive resilience of the country's labor market - although figures released Thursday showed that the rate of decline slowed.

The unadjusted jobless rate sank to 7 percent in October from 7.2 percent in September, with 2.945 million people out of work, the Federal Labor Agency said. That was down 86,000 from September, a drop the agency credited both to a traditional seasonal improvement and economic recovery.

In seasonally adjusted terms, the jobless rate was static at 7.5 percent, and the number of people without a job decreased by a modest 3,000 - much smaller than the declines seen in recent months and a fraction of the 37,000 seen in September.

That should be seen as "a correction to the above-average drop in September" and may have to do with the timing of people's vacations, said Timo Klein, an economist at IHS Global Insight.

"The average of 21,000 (fewer) per month observed since the labor market turned around in July 2009 should still be seen as the underlying trend," he added.

The headline figure's politically symbolic drop below 3 million had prompted Labor Minister Ursula von der Leyen to announce the unadjusted figures on Wednesday, a day early.

It was the first time since November 2008 - at the start of the economic crisis - that the number fell below 3 million and, von der Leyen said, the lowest October figure since 1991.

Germany's unadjusted jobless rate never rose above 8.7 percent during the crisis. Even at its height, a government-subsidized short-time work plan allowed employers to reduce production without cutting employees - and that has now left companies well-placed to respond to increasing demand.

Labor-market and welfare reforms carried out in the last decade by former Chancellor Gerhard Schroeder also have got some credit for the current situation. Under Schroeder, unemployment peaked at more than 5 million in 2005, and the jobless rate reached 12.6 percent.

"Labor market reforms, flexible working time arrangements and the easing of short-work plans are bearing fruit," said Dieter Hundt, the head of Germany's BDA employers association.

Germany's economy grew a massive 2.2 percent in the second quarter over the previous three-month period. That export-led surge has helped boost Germans' optimism about jobs and income and push up consumer confidence, raising hopes that long-sluggish domestic demand will pick up.

Last week, the government more than doubled its economic growth forecast for this year to 3.4 percent and lifted next year's outlook to 3.4 percent. It joined a group of economic think-tanks in forecasting that the number of unemployed will average less than 3 million next year for the first time since 1992, dropping to 2.9 million.

Source : TheJakartapost.com