💎 Fed’s first rate cut since 2020 set to trigger market. Find undervalued gems with Fair ValueSee Undervalued Stocks

UPDATE 2-German jobs data leaves post-Xmas spending unclear

Published 11/30/2010, 06:56 AM

* Jobless numbers fall 9,000 vs forecast for 20,000

* Support expectations of bumper Christmas for retailers

* Longer-term consumer spending picture more cloudy

* Unadjusted data show best Nov since 1991 -Labour Office

(Adds economist quotes, background)

By Joerg Voelkerling

NUREMBERG, Germany, Nov 30 (Reuters) - German unemployment fell modestly in November, fuelling hopes of sustained job creation but leaving questions hanging over its impact on consumers after an expected Christmas spending surge.

The number of unemployed in seasonally adjusted terms fell by 9,000 from the previous month, leaving the jobless rate unchanged at 7.5 percent, data from the Labour Office showed on Tuesday. A Reuters poll had expected a drop of 20,000.

"I would have expected a stronger decline after the strong upturn. Nevertheless the recovery is continuing," said Lothar Hessler at HSBC Trinkaus. "The positive trend will likely continue."

Europe's dominant economy has seen a swathe of positive economic data in recent months as it bounced back from recession, including steadily falling jobless rates that have raised hopes domestic demand growth will pick up the slack as an export-driven rally slows.

Last month, unadjusted unemployment fell below the 3 million mark for the first time since November 2008.

On Sunday, Germany's HDE retail industry association reported a strong first weekend of pre-Christmas shopping. The group expects overall Christmas sales to rise 2.5 percent from 2009, and spending to grow by 1 percent at least in 2011.

Consumer morale going into the holiday month of December rose more than expected for the sixth month in a row, market researchers GfK said. Economists say a better jobs market has encouraged Germans to spend more.

"Employment growth and a fall in savings has driven private consumption growth over the last two quarters," said Carsten Brzeski from ING Financial Markets. "German consumers seem set to finally spend their way out of the recession during the Christmas shopping season."

But economists will continue to keep a close eye on the labour market, where a sustained improvement could be a sign increased consumer spending has staying power. The IW institute in Cologne says a 1 percent rise in employment yields a 0.8 percent rise in private consumption.

SPENDING OUT OF RECESSION

Germany suffered its biggest postwar recession in 2009 when the economy contracted 4.7 percent. Driven by exports and helped by stronger-than-usual consumer morale, it has emerged quickly from the slump and left most of its euro zone peers trailing.

Detailed third quarter gross domestic product (GDP) data released last week showed a more balanced recovery was taking hold, with steady growth in private consumption.

Signs of a spending increase, at least over the near term, are growing.

ING's Brzeski's spending outlook for the coming months was positive: "The interplay between further domestic business investment and employment growth should carry the positive consumption momentum into next year," he said.

Leading German companies are also upbeat.

Earlier on Tuesday, German steelmaker ThyssenKrupp gave a positive outlook for 2011 after the economic boom in its home market and cost cuts offset ramp-up expenses of new plants in its last quarter.

"ThyssenKrupp remains cautiously optimistic about developments in its core markets and key customer sectors," the company said.

On an unadjusted basis, the number out of work fell by 14,000 to 2.931 million, making this November the most positive one since 1991, the Labour Office said.

(Writing by Brian Rohan, additional reporting by Sarah Marsh, Dave Graham, and Erik Kirschbaum; Editing by Mike Peacock, John Stonestreet)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.