German unemployment drops as economy brushes off global slowdown

German unemployment declined in August in a sign of confidence that Europe’s largest economy will continue growing.

Joblessness fell a seasonally-adjusted 7,000 to 2.79 million, the Federal Labor Agency in Nuremberg said on Tuesday. Economists had predicted a drop of 4,000, after unemployment rose in July. The jobless rate remained at 6.4 percent, the lowest level since German reunification.

Germany’s economy is poised for “solid” growth, supported by both external and domestic demand, the Bundesbank predicted on Aug. 17. Business confidence has improved in the past two months even as trade risks from China’s economic slowdown mount.

“The German labor market is very stable and robust,” said Johannes Gareis, an economist at Natixis SA in Frankfurt. “Amid a global economy weakened by a trailing dynamic in China, domestic consumption is more important than ever, and this is where the labor market acts as a crutch for the economy.”

The number of people without work declined by about 3,000 in western Germany and about 3,000 in the eastern part of the country, the data show.

The jobless rate in the 19-nation euro area probably remained at 11.1 percent in July for the fourth consecutive month, according to a separate Bloomberg survey. The European Union’s statistics office will publish that report at 11 a.m. Luxembourg time.

Source: Bloomberg