German Unemployment Rate Drops

Jobless rate in Europe's biggest economy declined to 8.5 percent in March as a traditional seasonal upturn boosted a resilient labor market, official data showed.

BERLIN (AP) -- The unemployment rate in Germany, Europe's biggest economy, declined to 8.5 percent in March as a traditional seasonal upturn boosted a resilient labor market, official data showed Wednesday.

The unadjusted rate was down from 8.7 percent in February, with 3.568 million people registered as jobless -- down 75,000 on the month and 18,000 on the year. Warmer spring weather generally helps bring down the figures by reviving construction and seasonal jobs.

"The spring revival has reached the labor market," Federal Labor Agency chief Frank-Juergen Weise said. But "even beyond seasonal influences, the German labor market has coped well with the economic crisis."

In seasonally adjusted terms, the unemployment rate dipped to 8 percent in March after five consecutive months at 8.1 percent. The number of people out of work declined by 31,000 on the month -- compared with economists' prediction of an increase of 7,000.

Germany's economy returned to modest growth last year after a sharp recession but stagnated in the fourth quarter. However, exports -- Germany's traditional economic motor -- have been recovering.

Unemployment also has been tamed by a government-backed program that allows companies to put workers on reduced hours in an effort to avoid layoffs. The labor agency estimated that some 850,000 people were involved in that program in the first quarter.

Even an exceptionally hard winter failed to push up unemployment dramatically this year.

Alexander Koch, an economist at UniCredit in Munich, noted that there has been a strong increase recently in demand for temporary workers.

"We do not expect a sizable rise in unemployment in the course of this year any more," Koch wrote in a research note -- although "if it turns out that the current global economic recovery is not as strong as widely expected, firms may have to revise their employment strategy in the end."

In another hopeful sign for the economy, a group representing the machinery industry said Wednesday that orders in the sector were up 26 percent on the year in February -- returning to growth after a disappointing dip in January.

Orders from abroad led the way with a 32 percent rise, while orders from inside Germany were up 16 percent, the VDMA group said.

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