German unemployment fell for the sixth consecutive month in December, buoying hopes the labour market has escaped the worse of the economic downturn.
The Federal Labour Office said seasonally adjusted unemployment fell by 3,000 on the month in December to 3.421 million, as statistical changes and a part-time work plan designed to prevent mass layoffs cushioned the labour market.
The jobless rate held steady at 8.1 per cent.
Economists polled by Reuters had forecast the jobless total would increase by 5,000 on the month and break the string of declines that has allowed Germany to defy the jobless trend elsewhere in Europe.
"The labour market appears to have dodged the negative effects of the crisis," said Marco Bargel at Postbank, adding the jobless level would probably not reach the 4 million forecast by the government.
Recession-hit Spain's job market is faring much less well - data today showed the number of people registered as jobless hit 3.9 million in December, up 54,657 on the month.
In France, economy Minister Christine Lagarde said on Tuesday unemployment there would continue to rise in 2010, despite improved growth prospects although she saw a turning point later in the year.
German unemployment has been largely kept in check by subsidies in Europe's largest economy that encourage firms to shift employees to part-time work rather than fire them.
"It will become more likely, due to the improving industrial data, that the situation here won't be as bad as feared," Bargel said of Germany.
A survey of purchasing managers released yesterday showed Germany's manufacturing sector posted its fastest growth since May 2008 in December.
Germany's job market was boosted in December by special one-off effects, including changes to how unemployment totals are calculated, the Office said. Without these, the adjusted jobless total would have risen by 6,000.
Most economists expect joblessness to rise steadily over the course of 2010 as companies, which are operating well below full capacity, begin to pare back their workforces.
Reuters