Tue Aug 1st, 2006 at 11:04:46 AM EST
Good news from the German economy, according to FT, though don't worry, it's tempered by concerns for the future. The OECD standard rate for June was 7.8%.
Unemployment in Europe’s largest economy registered its third-sharpest fall since the early 1990s in July, taking economists by surprise as Germany’s economic recovery was finally shaking up its long-depressed labour market.
“The figures are considerably better than expected, and that’s across the board,” said Elga Bartsch, economist at Morgan Stanley, after the Federal Labour Office said on Tuesday seasonally adjusted unemployment had dropped by 84,000 since June to 10.6 per cent of the active population.
The release is the latest in a sustained raft of positive economic news out of Germany, including a 0.8 per cent quarter-on-quarter rise in retail sales for the three months to July, the biggest in two years, as reported by the Federal Statistical Office this week.
While most economists now bank on growth of around 2 per cent this year, Germany will face formidable challenges in 2007, they warn, as reflected in weakening forward-looking confidence surveys.
Topping the list is the threat of a slow-down in the world economy and particularly the US, which would be a major setback for Germany’s export oriented industry.
Other adverse factors include political instability in the Middle-East, rising eurozone interest rates and a massive three-point rise in German value-added tax next January.
The quality of the jobs may not be good: lots of them seem to be temporary positions and some of them are probably attributable to the World Cup.
Remember that Germany is a country of two halves: the rates in the old East are much higher than the rates in the old West.