German unemployment drops slightly in May (Roundup)

Nuremberg, Germany - German unemployment declined slightly in May, cushioned by a rise in the number of short-time workers and a change in the way statistics are compiled, figures released on Thursday showed. The number of jobless fell by 127,000 last month to 3.45 million, leaving 8.2 per cent of the workforce without jobs, the Federal Labour Agency said. 'The spring revival reached the labour market later than usual this year and brought a considerable decrease in the number of people out of work,' said the head of the labour agency, Frank-Juergen Weise. But he warned that labour market indicators failed to show a trend for the better as Europe's biggest economy struggled to drag itself out of recession. Some 1.1 million workers were on short-time working conditions as factories acted to reduce output because of a fall-off in orders triggered by the global economic meltdown. In the key engineering sector, new orders in April slumped by 58 per cent from the same month of the previous year, according to figures released by the industry's umbrella association VDMA. Labour Agency officials said short-time working arrangements had saved hundreds of thousands of jobs from being axed in the automobile, car parts and engineering branches. The improved jobless figures were also helped by changes to the way statistics are compiled. Under the new calculations, people seeking work through private employment agencies are not classed as unemployed. If this category were added to the official figures, the number of jobless in May would be 3.47 million, a labour agency spokeswoman said. In seasonally adjusted terms, the number of jobless rose by 1,000 to 3.45 million, the agency said. The improved labour market figures follow generally upbeat forward-looking surveys this week which showed consumer confidence and business sentiment on the rise in Germany. Labour Minister Olaf Scholz said the developments on the job market were better than expected but warned that the country could not afford to sit back and relax. Economists have predicted the number of unemployed could climb to 4.1 million by the end of the year, with the government saying it expects the nation's economy to contract a dramatic 6 per cent this year.