— Adds Comments In 7th Paragraph from IAB’s Weise On 2012 Outlook

SA Unemployment: -22k (pan-German), -13k (West), -9k (East)
—

FRANKFURT (MNI) – The number of jobless in Germany continued to
decline in December, leaving the average level for 2011 at a 20-year
low, the Federal Labour Office reported on Tuesday.

In seasonally adjusted terms, 2.888 million persons were counted as
unemployed last month compared to 2.91 million from November, reducing
the unemployment rate by 0.1 percentage point to 6.8%.

Without adjusting for seasonal trends, the unemployment rate rose
0.2 point to 6.6%, reflecting a 67,000 jobless rise to 2.78 million. For
2011 as a whole, an average of 2.976 million persons were actively
searching for employment, the lowest level since 1991.

Job vacancies increased by 5,000 in December, adding to November’s
11,000 gain. Payroll jobs, the data for which carry a one-month lag,
were up by 25,000 after +34,000 in October.

Employment rose by 1.3% last year to a record high of 41.041
million, the sixth consecutive annual increase, the Federal Statistics
Office reported Monday. Unemployment measured in ILO terms dropped by
15% to 2.5 million, the lowest level since 1991.

A number of analysts expect further employment gains at the start
of this year, though at a more modest pace than last year. The December
factory PMI signaled a slowdown in new hiring to the weakest pace in 19
months.

Asked about labour market prospects for the first two months of
2012, Labour Office head Frank-Juergen Weise said that the number of
unemployed would likely top 3 million, with the stronger gain coming in
January. However, for 2012 as a whole, the average level would remain
below 3 million, he added.

Given the current economic environment, unemployment may be close
to bottoming out, the Labour Office’s research arm IAB suggested in a
recent study. “Further improvement would require significant economic
growth,” it argued.

In the same vein, the labour market may be approaching full
employment, the Bundesbank ventured in its Monthly Report for December.
“Further marked increases in employment are likely to be achieved only
through a reduction in structural unemployment, a rise in the active
population and more immigration.”

— Frankfurt bureau: +49 69 720 142, email: frankfurt@marketnews.com —

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