German unemployment fell once again in October, to 10 per cent in, encouraged by labour market reforms, but there is still no sign of the long-awaited turnaround in Europe's largest economy.
The Federal Labour Office said the seasonally adjusted jobless total fell 12,000 to 4.38 million last month, twice the drop forecast by many economists. However, there are still 265,000 more people out of work than at the same time last year.
"The reversal in developments in unemployment since early summer does not signal a trend change on the employment market. For that, employment must rise," said Mr Florian Gerster, head of the Federal Labour Office in Nuremberg.
The jobless fall of 9,000 in eastern states was three times as strong in western states with just 3,000 fewer out of work. However, overall unemployment in eastern states, at 17.3 per cent, remains more than double the rate of western states.
The unadjusted unemployment figure, more closely watched in Germany, fell by 55,100 to 4.152 million in October. The drop, however slight, is welcome news to Chancellor Gerhard Schröder and comes a week before his package of employment and social welfare reforms reach the second vote in the upper house, the Bundesrat.
The reforms are almost certain to be voted down by the Bundesrat's conservative majority, necessitating horse-trading.
However, Ms Angela Merkel, leader of the opposition Christian Democrats (CDU), said yesterday that the unemployment figures proved an economic revival was as far away as ever.
"I don't see any other reason for giving the all-clear. I can't see any signs of improvement," she said.
