NUREMBERG, Germany, Oct 9 - German unemployment adjusted for seasonal factors fell 14,000 in September, a source with knowledge of the data said on Thursday, attributing the surprising drop to recent labour market reforms. Economists polled by had predicted Federal Labour Office figures due at around 0755 GMT on Thursday would show a rise of 10,000 in the seasonally adjusted jobless total from 4.407 million recorded in August . The source also said headline unemployment fell 107,000 in September to 4.207 million and the unadjusted jobless rate fell to 10.1 percent from 10.4 percent in August, although the unadjusted number was 265,000 up on a year ago. The figures should still be a much-needed boost to Chancellor Gerhard Schroeder, who is battling left-wing rebels to get a new raft of controversial welfare reforms through parliament to try to revive the stagnant economy.
Europe's biggest economy slipped into recession in the first half of this year and seasonally adjusted unemployment has been above four million for almost a year-and-a-half as companies have trimmed staff to cut costs. Most economists have expected unemployment to drift higher in coming months despite changes the centre-left government has enacted to labour market rules including increasing pressure on the unemployed to take available jobs. Ford Motor Co.'s German unit plans to cut a further 1,700 jobs by the end of this year through early retirement, the company said at the end of last month. Employment in Germany's services sector, which accounts for about two thirds of the economy, has fallen for the past 18 months, a survey by NTC released last week showed. The source said Federal Labour Office attributed the unexpected fall to recent measures such as increased efforts by job centres to find placements for the unemployed and schemes to help the jobless set up their own businesses. Schroeder has staked his political future on getting further economic reforms through parliament by the end of the year and is facing down left-wing rebels ahead of a key vote on merging unemployment and other benefits on October 17. Federal Labour Office figures are frequently leaked to German media in advance of publication. Bild newspaper reported last week that German unadjusted unemployment in September fell 90,000 from the previous month to 4.22 million. Bild did not provide figures for adjusted unemployment, which smooths the figures to account for seasonal hiring and is the number the financial markets tend to focus on.///