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German unemployment defies predictions

After disappointing Eurozone manufacturing PMI figures there was slightly better news for the 17-nation currency bloc today as German unemployment was shown to have risen by significantly less than predicted by economists.

Back in December the German central bank commented that Germany – the largest economy in the Eurozone – may have shrunk notably in the fourth quarter despite recent rises in business confidence, so this positive result will be a welcome one.

Although economists participating in a Bloomberg survey estimated that the number of unemployed would increase by 10,000 in December, according to seasonally adjusted statistics compiled by the Federal Labour Agency the amount of people out of work actually only rose by 3,000 to 2.942 million.

The report also showed the adjusted jobless rate continuing to hover near to a twenty-year low at 6.9 per cent. One Frankfurt based economist asserted that: ‘The German unemployment rate will remain at a historically low level throughout 2013. We do not expect the labour market to deteriorate significantly. On the other hand, we also do not expect firms to add a significant number of jobs either.’

Meanwhile another economist stated: ‘Compared with other countries, the German job market is solid. We have seen some months with rising unemployment, but I think the numbers will turn for the better again soon.’

However, during a press conference Franck-Juergen Weise, the President of the Federal Labour Agency, was more cautious with his predictions.

He commented: ‘We expect a difficult year for the German labour market. But we don’t think there’ll be any dramatic shocks and there is good reason to believe in an improvement after 2013.’

There was other good news for the Eurozone this morning as Spain’s registered unemployment dropped in December for the first time since July.

The Madrid-based Labour Ministry reported that the amount of people registering for jobless benefits declined by an impressive 59,094 from November.

Whilst a greater number of manufacturing and construction workers were out of a job in December the report cited that the number of service-sector workers registered as jobless dropped by 49,438.

As of 11:05 pm

The Pound to Euro exchange rate is currently trading at 1.2347

The Pound to US Dollar exchange rate is currently trading at 1.6183

The Pound to Australian Dollar exchange rate is currently trading at 1.5407

The Euro to US Dollar exchange rate is currently trading at 1.3103

The Euro to Pound exchange rate is currently trading at 0.8096

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