German jobless rate fell for the fourth consecutive month in March as firms hired more people and optimism about the prospects of the improving economy rose.
The number of individuals who are currently unemployed plunged by an annualized 12,000 to 2.9 million, down from 15,000 in February, said the Federal Labor Agency on Tuesday. This exceeded the median estimate of a decline of 10,000 in a Bloomberg survey of 31 economists.
The adjusted unemployment rate remained static at 6.7 percent after being revised downwards the previous month to the lowest point in over two decades. The declining unemployment figures are bolstering local consumption, speeding up the country’s economic recovery.
The Bundesbank revealed that the German economy possibly rose “substantially” in the first quarter, after earlier expanding 0.4percent in the October to December period, beating analysts’ forecasts.
“The underlying trend is a gradual decline in German unemployment over the course of the year,” Holger Schmieding, a London-based chief economist at Berenberg Bank told Bloomberg. “However, unemployment cannot fall much further because the people who are still unemployed do not have the skills needed to find jobs.”
A Bloomberg survey of economists predicts Germany’s economy to grow by 1.8 percent in 2014. This is higher than the European Central Bank’s estimate of a growth of 1.2 percent in the whole of euro zone.
The number of unemployed persons fell by 10,000 in East Germany and 2,000 in the western part. Economists predict the unemployment rate in the European Union bloc to hover around 12 percent in February, which is close to a record-high.
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