(Bloomberg) -- German unemployment fell more than economists forecast in October, pushing the jobless rate to a fresh record low.
The number of people out of work declined by a seasonally adjusted 13,000 to 2.662 million in October, data from the Federal Labor Agency in Nuremberg showed on Wednesday. Economists in a Bloomberg survey forecast a drop of 1,000. The jobless rate dropped to 6 percent, the lowest level since the country's reunification.
Measures of manufacturing and business confidence suggest Europe's largest economy is poised to pick up toward the end of the year, after uncertainty over the U.K.'s vote to leave the European Union and weakening global demand caused a temporary slowdown in the third quarter. The Bundesbank said in October that underlying momentum is “still quite strong.”
“That number tends to be very volatile, but the trend is important,” said Jens Kramer, an economist at Nord LB in Hanover. “It shows that unemployment is steadily decreasing while employment is growing, which is a very favorable development for domestic demand and the German economic cycle.”
Economists surveyed by Bloomberg predict the German economy expanded 0.3 percent in the third quarter, after 0.4 percent in the previous three months. Gross domestic product data are due on Nov. 15.
Germany's central bank has pointed to export and business expectations in manufacturing as signs that the situation could improve in the coming month. Manufacturing grew at the fastest pace in almost three years in October, according to final data published by IHS Markit on Wednesday, as companies boosted hiring, partially in response to stronger foreign demand from the U.S and Asia.
“The labor market developed well in October,” Frank-Juergen Weise, president of the labor agency, said in a statement. “Unemployment fell markedly during the autumn revival, employment increased again and demand for new workers continued to rise.”
The number of people out of work fell by some 6,000 in western Germany and decreased by about 8,000 in the eastern part of the country, the labor agency said. At the same time, underemployment rose by a seasonally adjusted 11,000 nationwide due to a loosening of labor policies to target refugees, according to the report.
--With assistance from Andre Tartar Kristian Siedenburg Zoe Schneeweiss and Piotr Skolimowski To contact the reporter on this story: Carolynn Look in Frankfurt at clook4@bloomberg.net. To contact the editors responsible for this story: Paul Gordon at pgordon6@bloomberg.net, Jana Randow, Jeff Black
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