Germany's unemployment rate fell in June thanks to seasonal effects and brighter prospects in Europe's biggest economy, official figures showed yesterday.

The federal labour office said that 7.5 per cent of the workforce were out of work in June, down from 7.7 per cent in May, while the total number of unemployed fell 88.000 to 3.15 million.

Compared to June 2009, the total was down 257,000, and Carsten Brzeski, economist at ING Belgium, said that unemployment now stood at its lowest level since December 2008.

"The German labour market performance remains impressive and clearly is the show case of German crisis management," Mr Brzeski said.

"While unemployment rates have surged and sometimes even doubled in many countries, it is now almost back to its pre-crisis level in Germany. Stripped of seasonal effects skewing the figures, the adjusted number of jobless fell 21,000 from May, the labour office said, compared with a projected drop of 25,000 according to economists polled by Dow Jones Newswires.

"Looking ahead, the success story will continue for a while," Mr Brzeski said.

"Instead of a bleak future with mass unemployment, the German labour market is heading towards its best times since German reunification."