(Updates with comment from economist in fourth paragraph.)
June 30 (Bloomberg) -- German unemployment declined for a 24th straight month in June, underscoring the resilience of Europe’s largest economy amid the euro region’s debt crisis.
The number of people out of work fell a seasonally adjusted 8,000 to 2.97 million, the Nuremberg-based Federal Labor Agency said today. Economists forecast a drop of 17,000, according to the median of 32 estimates in a Bloomberg News survey. The jobless rate held at 7 percent, the lowest since records for a reunified Germany began in 1991.
German companies are stepping up output and hiring, bolstering consumer demand and helping drive the euro region’s economic expansion. Germany’s economic performance contrasts with that of Greece, where rioters failed yesterday to halt the passage of additional austerity measures as the debt-burdened country struggles to emerge from a recession.
“The German labor market has been improving rapidly since the middle of 2009,” said Aline Schuiling, an economist at ABN Amro Bank NV in Amsterdam. “The combination of robust employment growth and rising wage growth will underpin consumption this year and next.”
The euro traded at $1.4486 at 10:37 a.m. in Frankfurt, up 0.4 percent from yesterday.
The Bundesbank on June 10 forecast the economy will expand 3.1 percent this year after record growth of 3.6 percent in 2010. The “prospects of the German economy experiencing a lengthy period of expansion are rising,” the central bank said.
German carmaker Porsche SE is seeking to hire at least 1,000 people at its factory in Leipzig, while Volkswagen AG’s Audi unit plans to recruit some 300 skilled workers. Siemens AG, Europe’s largest engineering company, has said it has about 4,000 open positions, partly due to a lack of suitable candidates.
“While we don’t see a wide-spread, cross-sector shortage of skilled labor, there are problems in individual occupations such as electrical engineering,” Labor Agency head Frank- Juergen Weise told reporters in Nuremberg today.
With European governments from Spain to Ireland cutting spending, German companies have relied on faster-growing economies to boost sales. Bayerische Motoren Werke AG, the world’s biggest maker of luxury cars based in Munich, said on June 8 that deliveries jumped 22 percent last month.
Germany’s expansion “continues to be driven by foreign demand, but even more now by domestic demand,” the Essen-based RWI economic institute said on June 16. Hiring will increase and “the situation of public households will improve considerably” through 2012, it said.
GfK AG said on June 28 its consumer sentiment index, based on a survey of about 2,000 people, will rise for the first time in four months in July. “Good general conditions” have become “more influential than detrimental factors, such as the state of affairs in Greece,” it said.
European leaders are seeking ways to agree on a deal to prevent Greece from restructuring its debt. Greek lawmakers yesterday passed a 78 billion-euro ($113 billion) austerity package and German Finance Minister Wolfgang Schaeuble is due to meet with banks and insurers in Berlin today to discuss their participation in a second aid package.
The euro-region economy is already showing signs of cooling. European economic confidence dropped to the lowest in eight months in June and manufacturing growth weakened. In Germany, investor confidence dropped more than economists forecast last month to the lowest in 2 1/2 years.
The recent slowdown in the decline of German unemployment may be due to the fact that much of the economy’s rebound after the winter season set in earlier than usual, the Labor Agency said today in its report. The economy expanded 1.5 percent in the first quarter from the fourth, when it grew 0.4 percent.
According to comparable data from the Organization for Economic Cooperation and Development, Germany’s jobless rate was 6.1 percent in April while the euro-region average was 9.9 percent. France had 9.4 percent unemployment, the U.S. 9 percent and Spain 20.7 percent.
In the euro-region economy, unemployment probably held at 9.9 percent in May, according to a Bloomberg survey. The European Union’s statistics office in Luxembourg will release the report tomorrow.
--With assistance from Andreas Cremer in Berlin and Richard Weiss in Frankfurt. Editors: Simone Meier, Alan Crawford
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