German jobless rate up to 6.6 percent in December

Germany's jobless rate edged higher in December, but the overall picture in Europe's biggest economy remained positive as the average number of people unemployed last year was the lowest for two decades, official figures showed Tuesday.

The unadjusted jobless rate was up to 6.6 percent last month from 6.4 percent in November, the Federal Labor Agency said. The number of people registered as unemployed rose 67,000 to 2.78 million. Compared with December 2010, that was a decrease of 231,000.

It is common for unemployment figures to rise at this time of year as winter weather weighs on industries such as construction, though the agency said the increase was smaller than usual.

Germany's job market is in very good shape overall after two years of strong economic growth. Its strength contrasts with high unemployment in economically weaker countries that have been hit hard by the eurozone debt crisis - in the worst case, Spain, the jobless rate is above 20 percent.

The labor agency said the number of people out of work averaged 2.976 million over the course of last year, 263,000 fewer than in 2010 and the lowest overall figure since 1991.

Labor agency chief Frank-Juergen Weise said that "demand for labor was very high over the whole year." Last year's average jobless rate was 7.1 percent, down from 7.7 percent in 2010.

After a strong export-driven performance over the last two years, Germany is expected to see much weaker economic growth in 2012 because of the eurozone debt crisis and economic troubles elsewhere.

Tuesday's figures showed a still-positive underlying trend on the German job market, with the seasonally adjusted jobless rate dipping to 6.8 percent in December from 6.9 percent a month earlier. In adjusted terms, 22,000 fewer people were unemployed, following a similar decline in November.

Andreas Rees, an economist at UniCredit in Munich, said that the 6.8 percent figure was the lowest since German reunification in 1990, and noted that it was the 29th monthly decline in 32 months in seasonally adjusted unemployment. He added that the German labor market still has "substantial" momentum.

He said "companies are still sitting on a huge pile of backlog orders, thereby keeping the labor market going" despite signs of new orders decreasing.

"We expect job creation in the next few months to continue, which is good news for consumer expenditures in 2012," he said.

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