German unemployment fell to 8% of the workforce in September, official data showed today, confounding forecasts of a slight increase in the biggest European economy.
Government subsidies which allow firms to cut working hours has so far prevented a flood of jobless claims but experts warn that claims could rise significantly in coming months.
Germany has still rebounded more quickly than expected from its worst recession since World War II, edging back to growth in the second quarter of this year with expansion of 0.3%.
That could help companies avoid outright redundancies, although a report in the daily Die Welt said today that Germany's biggest bank, Deutsche Bank, wants to eliminate or farm out 1,300 German jobs.
In August the unemployment rate stood at 8.3%.
The Federal Labour Agency said the total number of unemployed fell by 125,000 people from August to a total of 3.346 million. That was, however, an increase of 266,000 from September 2008, it noted in a statement. Analysts had forecast a new jobless rate of 8.4%.
But September often sees a drop in the number of unemployed German workers, and agency president Frank Weise was quoted as saying that the latest results 'were not a change in the trend' higher in recent months.
