Official figures show that German unemployment dipped to 7.6% of the workforce in November from 7.7% the previous month.
The Federal Labour Agency said the headline jobless figure fell by 13,000 to just over 3.2 million. The figures are being seen as a sign that the German government's 'short-time working' scheme has limited the fall-out from the global economic and financial crisis.
The seasonally-adjusted number of jobless workers declined by 7,000 whereas analysts had expected an increase of 10,000.
German authorities last week approved last week a 12-month extension of the popular 'Kurzarbeit' scheme which allows firms hit by recession to cut costs by keeping staff at home or shortening their hours but without having to fire them.
The state pays up to 67% of a worker's salary for a period of up to two years, and the latest data showed around 1.5 million workers were covered by the scheme.
Retail sales bounce back in October
Meanwhile, German retail sales climbed by 0.5% in October from the previous month, ending two months of decline, provisional figures released today by the national statistics service showed.
The result was in line with an average forecast of analysts, and followed a drop in September of 0.2%, the Destatis service said. In August, retail sales had fallen by 1.5% on a monthly basis.
On an annual basis, the sales were down by 1.7%, which marked an easing from September's drop of 3.2%.
Retail sales are still forecast to decline by 2% for 2009 as a whole by the trade federation HDE, while the overall economy is tipped to post a full-year contraction of around 5%.
HDE expects the end of year holidays to boost consumer spending a bit but anticipates softer sales in 2010.
'Consumer confidence has weakened in recent months and increasing unemployment could dent the last spark of hope for a spending spree,' it added.
