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WORLD BUSINESS

German jobless rate resumes fall

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The figures are said to show a fall more than twice what was tipped.

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BERLIN, Germany -- German unemployment fell a seasonally-adjusted 0.2 percent in October to 11 percent, the government's labor office reported Wednesday, crediting recent welfare reform.

The number of jobless fell 94,000 to 4.56 million, the Federal Labor Agency said in a statement.

Eastern German unemployment fell faster than in the west - by 57,000 to 1.46 million, compared to a drop of 37,000 to 3.10 million, the agency said.

It attributed the faster drop to the government's welfare reform that forces long-term jobless to look harder for work.

Early this year, Germany's jobless rate reached a postwar record of over 5 million, or more than 12 percent, as the welfare reform took effect.

Heinrich Alt, the head of the labor office, said he could not rule out a return to a figure above that benchmark at some point in the winter, Reuters reported.

Unemployment was the main campaign issue in the September election, which the leftist government of Chancellor Gerhard Schroeder lost to conservatives led by Angela Merkel.

Merkel is now negotiating with Schroeder's Social Democrats to form a grand coalition after neither party won an outright majority.

Economists polled by Reuters last week had forecast on average a fall of 15,000 from September.

"(The decline) is a reflection of the moderate economic recovery having a first impact on the jobs market. One can see that in the clear increase in the number of open jobs this year," Alexander Koch of Hypovereinsbank told the agency.

"But to be fair, one also has to point out that the lion's share of that increase is due to state-supported measures such as one-euro jobs. In October, the fantastic weather likely also had a somewhat positive effect."

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