German employment hits record 45m in September, but vacancies dip

The German jobs market continued to tighten in October, which should continue to support salary growth over the short-term, even as employment hit a record high.

According to the German Labor Agency, in seasonally-adjusted terms the number of unemployed people in the Eurozone's largest economy declined by 11,000 to reach 2.292m, although that was slightly less than the 12,000 person fall that economists had anticipated.

In parallel, the rate of unemployment was steady at 5.1%, which was also as expected.

Separately, the Federal Office of Statistics reported that the number of employed in Germany grew by 557,000 over the year to September, hitting a record 45.0m.

Nevertheless, the number of advertised vacancies declined in October.

That, Claus Vistesen at Pantheon Macroeconomics said, might be the first reflection in the hard data of the recent weakness in factory sector activity and of the slowdown in industrial firms' work backlogs.

Nevertheless, more data was needed in order to be sure, Vistesen said.

"In the meantime the headline story is intact. The German labour market is still tightening, which will continue to support wage growth in the coming six-to-nine months," he explained.

"We are also encouraged by the recent rebound in the labour market institute’s surveys, though these data are slight at odds with the PMIs pointing to a slowdown in the growth of employment."