German unemployment drops

In May, around 83,000 unemployed Germans had found new jobs, cutting the country's nominal unemployment figure to 2.937 million, the German Labor Agency (BA) announced Wednesday.

Subsequently, the German jobless rate fell from 7.1 percent in April to 6.8 percent in May.

BA attributed the first drop below the three-million mark in three months to the spring upswing in the German economy, which had boosted economic activity especially in the construction sector. In terms adjusted for such seasonal factors, unemployment actually climbed by 21,000, BA added.

Moreover, nominal German unemployment compared with May 2012 was also 82,000 people higher in May this year, indicating that output growth in Europe's biggest economy was still sluggish.

Nevertheless, Labor Agency Chief Frank-Jürgen Weise said the German labor market was still in good shape and was developing in a solid way despite difficult business circumstances.

The weaker-than-expected spring jobs upswing comes after meager economic growth of just 0.1 percent in Germany in the first three months of 2013.

However, economic recovery in Germany was picking up speed, according to a preliminary forecast released by the German Institute for Economic Research (DIW) Wednesday.

The think tank said it was expecting second-quarter growth in Germany to reach about 0.3 percent as the slump in industrial output had bottomed out. Building sector activity was rebounding strongly after the harsh and long winter in Germany, DIW said. Capital investments by businesses, however, were still sluggish waiting for the global economy to gather momentum.

uhe/mz (dpa, Reuters, AFP)