German unemployment unexpectedly fell in August for the second month in a row, aided by government measures designed to prevent mass layoffs ahead of the federal election on September 27th.
A government scheme to subsidise part-time work and statistical changes helped push joblessness down by 1,000 on the month, adjusted for seasonal swings, Federal Labour Office data showed today.
The fall followed a dip of 5,000 in July and contrasted with a Reuters consensus forecast for a rise of 30,000.
The unemployment data was the last before Germany's federal election and could lend support to Chancellor Angela Merkel's conservatives who already lead other parties in opinion polls.
Merkel's predecessor Gerhard Schroeder was forced to call an early election in 2005, in part because of a surge in unemployment which hit support for his government.
He narrowly lost to her conservatives, but she seems unlikely to suffer the same fate given the unexpected resilience of the labour market and a nascent recovery from Germany's biggest post-war recession.
Still, the Labour Office said the decline was largely thanks to the one-off effects of the government's "Kurzarbeit" scheme, which encourages firms to put their workers on part-time shifts rather than fire them.
If this special factor was stripped out, there would have been an adjusted rise of around 25,000.
"What a positive surprise. The feared collapse in the labour market didn't happen," said Ralph Solveen, an economist at Commerzbank. "But it will certainly hit in the autumn."
The widespread use of shortened working hours has reduced job losses in Europe's largest economy, where unemployment has risen by around only 300,000 since the global financial and economic crisis intensified with the collapse of US investment bank Lehman Brothers last September.
A Labour Office official told Reuters today that German employers in the second quarter increased their use of the government's subsidy for shorter working hours.
The number of German workers on shorter working hours stood at 1.43 million by the end of June, a rise of 300,000 compared to a previous figure released to the public in March, said the official, who declined to be named.
The jobless decline in July was the first in nine months.
Reuters