German hitslabour market strong with unemployment at 24-year low

The number of people registered as unemployed in Germany is lower than it has been since December 1991, as recovery in Europe's biggest economy continues, data showed on Tuesday.

The seasonally-adjusted jobless total fell by 6,000 to 2.786 million, the Federal Labour Office calculated.

The drop was smaller than expected, as analysts had been pencilling in a decline of around 10,000.

The unemployment rate -- which measures the jobless total against the working population as a whole -- stood at 6.4 percent in May, unchanged from April and the lowest level since west and east Germany reunited in 1990 after the fall of the Berlin Wall the previous year.

In raw or unadjusted terms, the jobless total decreased by 81,000 to 2.762 million and the jobless rate fell to 6.3 percent in May from 6.5 percent in April, the labour office said.

Normally, unemployment declines in the spring as the warmer weather allows companies in sectors such as construction to take on workers.

But the current strength of domestic demand in Germany was magnifying that effect, said the head of the labour office, Frank-Juergen Weise.

"The labour market is developing positively, both on the supply and demand side," he said.

While economic growth in Germany slowed in the first three months of this year, with gross domestic product (GDP) expanding by a modest 0.3 percent compared with 0.7 percent in the preceding three months, robust domestic demand suggested the labour market would continue to develop positively, analysts said.

"Germany's job market is as solid as a rock," said Natixis economist Johannes Gareis.

"The rate of decline in unemployment eased somewhat since the start of this year. But early indicators point to a continuation of Germany's job market boom in 2015, backed by solid output growth," the expert said.

BayernLB economist Stefan Kipar agreed.

"Overall, the trend on the labour market remains positive," he said.

"Economic momentum has tailed off slightly since the beginning of the year, but in view of the positive sentiment indicators, we're not expecting any pronounced period of weakness," Kipar continued, pointing to favourable factors such as the low oil price and weak euro.

The positive trend was backed up by rising employment, with the number of people in work increasing by 213,000 to 42.6 million in April, according to separate data published by the federal statistics office Destatis.

The government also welcomed the data.

"Despite the chilly spring weather, employment is at full operating temperature," said Labour minister Andrea Nahles.