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German jobless unexpectedly drops
BERLIN, Germany (Reuters) -- German unemployment adjusted for seasonal factors fell 14,000 in September to 4.392 million, bucking economists' expectations for a slight rise, Germany's Federal Labour Office said on Thursday. The adjusted jobless rate fell to 10.5 from 10.6 percent. August's adjusted jobless total was revised down 1,000 to 4.406 million, all confirming figures earlier obtained by Reuters. Headline unemployment fell 107,000 in September to 4.207 million and the unadjusted jobless rate fell to 10.1 percent from 10.4 percent in August, although the unadjusted number was 265,000 up on a year ago. Economists polled by Reuters had predicted a 10,000 rise in the seasonally-adjusted jobless total from August. The figures should be a much-needed boost to Chancellor Gerhard Schroeder, who is battling left-wing rebels to get a new raft of controversial welfare reforms through parliament to try to revive the stagnant economy. Economists said the drop was due to labour market reforms, rather than signalling any clear improvement in the jobs market. "It's positive, but it does not mark a change in the trend. We will see further rises in winter. The Hartz labour market reforms are not creating jobs. They just mean the unemployed are being placed more rapidly. A rise above five million at the turn of the year is not unlikely,'' Thorsten Polleit at Barclays Capital in Frankfurt said. Joerg Kraemer, an economist at Invesco Asset Management, said the labour office had proved effective at removing from the statistics people who did not wish to work. Federal Labour Office chief Florian Gerster told a news conference the full effect of labour market reforms was not expected to be felt until 2005 or 2006. Employment data released on Wednesday showed employment continued to fall in July and Gerster, warned there was unlikely to be a clear jobs improvement until the middle of 2004. "In 2003 we are still in choppy seas... In 2004 we will not, on average, see a breakthrough either. Only in the course of the year will things begin to point up and growth will reach a point at which jobs start to be created,'' Gerster told reporters at a parliamentary hearing into more planned labour market reforms. Ford Motor Co.'s German unit plans to cut a further 1,700 jobs by the end of this year through early retirement, the company said at the end of last month. Employment in Germany's services sector, which accounts for about two thirds of the economy, has fallen for the past 18 months, a survey by NTC released last week showed.
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