German jobless at 20-year low

According to the German Federal Labour Agency, the number of people out of work in the country fell by a seasonally-adjusted 18,000 to 2.84 million in March. Economists polled by a new Bloomberg survey had predicted a drop of 10,000.

The adjusted jobless rate fell to a 20-year low of 6.7%. These figures indicate that the underlying strength of the German economy is still intact even in the face of the debt crisis that has hit many of Germany’s export customers.

According to the European Commission, Germany’s economy will grow by 0.6% in 2012 while that of the eurozone is forecasted to shrink by 0.3%. Meanwhile, German investor confidence is at its highest in 21 months and business confidence at an eight-month high.

In the UK, the Office for National Statistics (ONS) reported that retail sales fell by 0.8% in February compared with the previous month. The ONS also revised downwards January’s strong 0.9% growth in sales to a mere 0.3% (compared with the previous month). February’s worse-than-expected figures were the weakest in nine months.

Moreover, overall sales volumes notched up by only 1% between February 2011 and February 2012. Clearly the UK cannot count on consumer spending to secure robust economic growth.

Finally, global markets cheered following the cautious assessment of the US labour market by the chairman of the Federal Reserve, Ben Bernanke.

Mr Bernanke made clear that the Fed is in no hurry to reverse its ultra-low interest rate policy. According to Mr Bernanke, faster growth is needed to make a meaningful dent in the unemployment rate which currently stands at 8.3%.

Meanwhile new orders for US durable goods, such as cars and home appliances rose by 2.2% month-on-month in February after falling by 3.6% month-on-month in January. The figure for February was below economists’ expectations of a 3% increase.

This article was compiled by Bank of Valletta for general information purposes only.