German Unemployment Falls to 10.1% in February

Germany's unemployment rate fell in seasonally unadjusted terms to 10.1% in February from 10.2% the month before, the country's Federal Labor Office said Wednesday, a sign that companies continued to hire more workers.

The number of Germans without work in the country in February was 4.22 million, down from 4.24 million the month before, but the rate was still well above the 9.6% figure reported in December 2006.

The statistics looked better when adjusted to compensate for the expected winter drop in industries such as construction and farming, with the adjusted number of jobless dropping by 79,000 and the total rate falling to 9.3% from 9.5%, the lowest point since August 2001.

"The good labor market performance is continuing," the labor office said in its report, nothing that unusually mild winter conditions in Germany helped employment gain a foothold.

For the year, Europe's biggest economy saw its largest drop in the ranks of the unemployed, the head of the country's labor office told reporters.

"From February 2006 to February 2007,unemployement declined by 826,000 women and men. That's the largest yearly decline recorded," Frank-Juergen Weise said.

Germany's unemployment rate has been steadily improving as the country maintains its economic upswing, including stronger consumer demand and investment within the country by German and foreign companies.

"Despite a brief cold spell in January, the current winter was the warmest winter ever recorded. Accordingly, the usual buildup in winter unemployment remained well contained over previous months," said Alexander Koch, an economist with UniCredit in Munich. "Although the very mild weather conditions possibly biased the continuing improvement in adjusted unemployment somewhat, the main driver is the solid economic dynamic together with increasing investment in capacity expansion."