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German unemployment falls to new record low

Frankfurt - German unemployment unexpectedly dropped to a new record low in March as Europe’s largest economy powered ahead.

The jobless rate fell to 5.8%, from 5.9%, and the number of people out of work slid by a seasonally adjusted 30 000 to 2.6 million, data from the Federal Labour Agency in Nuremberg showed on Friday. Economists in a Bloomberg survey forecast no change in the unemployment rate and a 10 000 decline in the number of people seeking work.

The report echoes the Bundesbank’s prediction that the labour-market situation is likely to be even better than reported in recent months due to a “massive” upward correction in employment growth for the second half of last year.

That meshes with the strongest levels of business confidence since 2011, signaling that the country’s economic momentum is set to continue even as inflationary pressures show signs of easing.

“The job market continues to develop favorably,” Detlef Scheele, board member of the labor agency, said in a statement. “With the onset of spring activity, the number of unemployed people has declined, employment growth is continuing unabatedly, and demand for new employees continues to be high.”

Joblessness fell by about 18 000 in western Germany and by 12 000 in the eastern part of the country, the labor agency said.

Data published on Thursday showed that consumer-price growth slowed to a rate of 1.5% in March, the first slowdown since August 2016. The cooling - which was also seen in Spanish prices - could be a precursor to softer eurozone numbers, which will be published at 11:00 Luxembourg time on Friday. The European Central Bank has predicted that inflation would probably peak in the first quarter.

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