Germany – Jobless rate dips in March to 12 percent, government figures show

Germany 's jobless rate edged downward in March, falling slightly to 12 percent and breaking back below the politically sensitive 5 million mark, according to government figures released Thursday.

Unemployment was down from 12.2 percent in February and 12.1 percent in January, the Federal Statistics Office said, with the number of Germans without a job falling to 4.976 million, compared to 5.048 million in February.

Chancellor Angela Merkel had given parliament a preview of the decrease on Wednesday, saying the numbers had fallen to "just below 5 million."

When adjusted for seasonal shifts, the Nuremberg-based agency said that the number of people without a job rose by 30,000, the such second such increase in three months. The adjusted unemployment rate was 11.4 percent, up from 11.3 percent the month before.

The agency cited the bitterly cold weather in March and heavy snowfall, which it said impeded traditional outdoor work, including construction.

Analysts shrugged off the adjusted figures, and noted that the unadjusted figures were further evidence that Europe 's biggest economy was moving steadily forward, but a complete recovery is still far afield.

"The worst is definitely behind us. This will give consumer expenditure some impulse in the further course of 2006," said Andreas Rees, an economist with HVB. "Unfortunately, a major recovery on the labor market in the true sense of the word is still out of reach."

Looking toward this summer's World Cup, Heinrich Alt, a board member of the German Labor Office, said he expected that as many as 60,000 new jobs would be created for the monthlong event, with half of those remaining permanent.

The World Cup, featuring 32 teams, will be played in 12 German cities from June 9 to July 9.

Economists and labor officials say the additional workers will be needed to staff shops that will have longer opening hours as well as at hotels, restaurants and bars and other businesses.

The jobless figures marked the third time this week that Germany 's economy showed signs of improvement.

On Wednesday, consumer confidence surged amid rising optimism about the nation's economic outlook, a survey by the GfK research group showed. The group's forward-looking consumer climate indicator rose to 5.1 points for April, up from a revised March reading of 5.0 points. The March figure was revised upward from an initial estimate of 4.8.

On Tuesday, the closely watched Ifo index of business confidence rose to its highest level in almost 15 years. Munich 's Ifo institute reported that its business sentiment index rose to 105.4 in March from 103.4 in February. It was the strongest reading since April 1991, during Germany 's post-reunification boom, reports the AP.

D.M.