German jobless rate falls to new record low

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The jobless rate in Germany dropped to a new record and was recorded as 6.7% in March. This rate bucked up the trend in the neighbouring European countries and hopes that private consumption will target the Euro zone's economy this year.

The data rate from the Labour Office showed that the unemployment rate declined for 5th consecutive time in the month of March.

The decline was stronger than expected 18,000 to a total of 2.841 million. The forecast of 35 economists that was jobless had dropped by 10,000.

The German officials said that the March weather and the strong business optimism feeling is being seen as the force behind the drop in unemployment.

This data posed as a good news for the German finance minister Wolfgang Schaeuble who proposed the budget plans based on strong tax revenues.

The export driven economy of Germany recovered speedily from the 2008/09 financial crisis year. This, lead to some leading institutes increase their growth forecasts and economists are predicting stable output in the 1st quarter of 2012. This has lead to the decline of the two successive quarter recession.

The labour market poised to be as strong as possible even in the weak economic scenario thereby increasing the confidence of consumers which rose to 7 from 6 as per the reports shown by the research group GFK.

With the reduced unemployment trade unions are now able to demand higher wages after facing years of restrained pay. IG Metall and Verdi unions have asked for the 6.5% rise in the wage for around 5 million workers.

Berenberg Bank's Christian Schulz said that the demand for higher wages was expected as there was a tightening labour market. Also separate data showed that the number of Germans working rose seasonally to 41,000 in the month of February.

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