German joblessness fell more than economists anticipated in December in a sign that economic momentum will continue to be underpinned by household spending.
The number of people out of work declined by a seasonally adjusted 14,000 to 2.757 million, the Federal Labor Agency in Nuremberg said on Tuesday. Economists in a Bloomberg survey predicted a drop of 8,000. The unemployment rate remained unchanged at 6.3 percent, the lowest level since German reunification.
German growth has been driven by domestic demand in three of the past four quarters, and the Bundesbank predicts that private consumption will continue to be supported by significant increases in employment and income. Manufacturers are set to step up hiring in coming months after a strong increase in new business started to stretch capacities at some plants, according to Markit Economics.
“The favorable development on the labor market continued at the end of the year,” Frank-Juergen Weise, president of the labor agency, said in a statement. “Demand for labor and employment subject to social-security contributions continued to be positive.”
A Purchasing Managers’ Index rose to the highest level in four months in December, with export orders rising at the fastest rate in nearly two years.
Although emerging markets have suffered a slowdown in recent months, exports probably rose as much as 6 percent last year as companies benefited from a weaker currency and cheaper commodity prices, according to the BGA Federation of German Wholesale, Foreign Trade and Services group.