German jobless rate continues to decline despite Brexit

German unemployment continued its decline in August, signaling that consumption driven by a strong labour market may cushion the blow to Europe’s largest economy from Britain’s decision to leave the EU.

The number of people out of work fell by a seasonally adjusted 7,000 to 2.675 million, data from the Federal Labour Agency in Nuremberg showed on Wednesday. Economists in a Bloomberg survey forecast a drop of 4,000.

The jobless rate remained at a record low of 6.1 per cent.The sign of job-market resilience comes after German business sentiment unexpectedly declined the most in more than four years and company executives raised concern that political uncertainty related to Brexit threatened to damp output.

Policy makers have expressed confidence that the economic recovery will continue, bolstered by private spending, a pickup in investment and solid export growth.”The labour market continued to develop favorably overall,” Frank-Juergen Weise, president of Germany’s labor agency, said in a statement.

"The demand for workers, measured by employment and reported openings, continues to be strong."The number of people out of work fell by 1,000 in western Germany and decreased by 6,000 in the eastern part of the country, the labor agency said.

Unemployment is likely to climb in the coming months as hundreds of thousands of job seekers, who arrived as migrants last year, prepare to enter the labor market.