German unemployment falls to record low of 6.5% in December

The number of people out of work in Germany fell by 27,000 on a seasonally adjusted basis to 2.84 million

The jobless figure fell from 6.6 per cent in November (Getty )

Unemployment in Germany has fallen to a record low of 6.5 per cent – the lowest since the country’s reunification in 1990.

Figures released today by the Federal Labour Office revealed that the jobless rate, which had been forecast to hold steady, fell from 6.6 per cent in November.

The number of people out of work in Germany fell by 27,000 on a seasonally adjusted basis to 2.84 million. That was a sharper decrease than the consensus forecast in a Reuters poll, which had been for a drop of 6,000, and was steeper than even the biggest estimate, for a decrease of 15,000.

"The German labour market is robust and should contribute to a positive consumer climate ... and strong growth of private consumption this year," Postbank economist Heinrich Bayer told Reuters.

But Bayer said unemployment was unlikely to keep falling so fast.

"The weak economy in the winter and the fact the first quarter probably won't be especially good, either, should slow down the declines in joblessness, and the introduction of the minimum wage could also put the brakes on during this year."

Chancellor Angela Merkel's government introduced Germany's first country-wide wage floor of €8.50 an hour on 1 January. Economists are divided about whether it will cost jobs or boost consumption.

Employment is at a record high in Germany and wages are rising while inflation is at a five-year low. All that is helping to boost domestic demand at a time when investment is weak and exports are sluggish.