·
German unemployment fell again last
month, a third successive decrease and the fifth in the last seven
months. In a press report accompanying release of the November
data, government officials attribute this improvement to several
policies aimed at fostering a market for temporary workers and
subsidizing self- employment. The unemployment rate remained at
10.5% for a third month, as the rate in eastern Germany edged down 0.1%.
· At the same time, employment in Germany has yet to turn higher. These data lag by two months and were just reported today for September, which saw a decrease of 29,000. The monthly contraction is moderating, though, and two other reports suggest room for some optimism that an upturn could develop soon. The November Purchasing Managers' survey published yesterday for the services sector showed a 2.8-point rise in the employment component; as noted here in yesterday's Commentary, it remains below the 50% up/down dividing line, but is certainly headed in the right direction. Today, the Federal Statistics Office also published factory orders for October. They rose 1.8% from September, with a 1.1% rise in foreign orders accompanying a sharp 2.4% advance in domestic orders. The local orders had also been up 3.0% in September. Thus, better prospects in both services and manufacturing may help generate outright job gains in Germany in the next few months.