BERLIN, July 8 - German seasonally-adjusted unemployment showed a surprise 33,000 fall in June, helped by labour market reforms and new measures to encourage people to seek work, the Federal Labour Office said on Tuesday. Labour Office chief Florian Gerster said although the June jobless fall was no one-off, the economy was still far from recovery and growth of at least one percent in 2004 would be needed to boost the job market. The seasonally-adjusted fall was the second monthly drop in a row after a 10,000 decline in May, revised from an originally reported fall of 4,000. "The surprisingly strong decline in seasonally-adjusted unemployment is attributable to increased measures to activate the jobless and to the effect of the two labour market reform laws," Gerster said, presenting data that confirmed figures leaked to earlier. Unemployment centres have been summoning jobless people more frequently to job-placement meetings, deterring some from claiming jobless benefits.
Analysts in a poll had been expecting the jobless total to rise by 15,000 and economists viewed the June data with caution. The adjusted jobless rate fell to 10.6 percent in June from 10.7 percent in May. Unemployment was 18,000 lower in west Germany, and 15,000 down in the east in seasonally adjusted terms. NO CYCLICAL UPTURN "This is really a very positive surprise but unfortunately it has nothing to do with the economy. It's only a statistical effect because many people who used to be registered as unemployed are no longer included in the numbers," said Ralph Solveen, an economist at Commerzbank. "The labour market has not yet improved. We'll just have to wait until next year for that," he added. In an effort to stimulate the jobs market, the government has introduced measures to boost temporary employment and encourage workers to take low-paid jobs.
New legislation also threatens the unemployed with docked benefits if they do not immediately register for job placement when they are made redundant. The government has also started offering subsidies to people to become self-employed. Economists agreed with Gerster that the jobless fall did not reflected a cyclical upturn. "These numbers are so out of line with the picture of a stagnating economy that they will probably be seen as a statistical oddity due to the change in the labour laws rather than changing the underlying picture," said Holger Schmieding, an economist at Bank of America. Headline unadjusted unemployment fell to 4.257 million from 4.342 million in May. //