German unemployment dropped again more than expected in December. Unemployment fell by 22 000 to a total level of 2.888 million, while only a decline by 10 000 was forecast. As a result, the unemployment rate dropped unexpectedly, from 6.9% to 6.8%, reaching a new record low. The number of vacancies continued to rise, but at a slower pace than in November (5 000 from 11 000).
Employment, which is reported with an extra month lag, rose by 25 000 in November. The German labour market remains remarkably resilient, despite the euro zone debt crisis, slowing economic activity and fears for a new recession. As the labour market is traditionally lagging, the situation might deteriorate over the coming months, but for now the trend remains encouraging.