German Unemployment Rate at 19-Month Low

Germany’s jobless rate fell to a 19-month low of 11% in June and industrial output grew in May, reports showed Tuesday, signaling growth is accelerating in Europe’s biggest economy

Unemployment fell by 49,000 to 4.27 million in June, the Federal Labor Office said. That’s down from 4.32 million, an 11.2% rate, in May, and the sixth straight drop this year. The Economics Ministry said production rose 0.9% in May and 5.3% in the year.

Falling German unemployment and accelerating industrial production, coupled with reports that Italian inflation remains near a 29-year low and Austrian wholesale prices fell, suggest the 11 nations adopting the euro currency in January will start with low interest rates and growing economies.

“We’re seeing a growth revival in the whole euro area,” said Eckhard Schulte, an economist at Industrial Bank of Japan. “We’ve seen the turnaround in the German labor market and domestic growth is rebounding.”

In Germany, the drop in joblessness could boost the come-from-behind reelection bid of German Chancellor Helmut Kohl, who is seeking a record fifth term. Kohl, who has used the decline in joblessness to coin a new campaign slogan, “The Upswing Has Arrived,” is also promoting the nation’s 3.8% economic growth in the first quarter, the fastest since reunification.

The benchmark 5.25%, 10-year German government bond price fell to push its yield up to 4.71%, after touching a record low of 4.69% earlier.