German jobs market continues sizzling recovery in October

Germany's job market continued recovering, clocking in with its best October performance since 2009, although the underlying reality was still gruesome.

In seasonally adjusted terms, the rate of of unemployment in the Eurozone's largest economy dipped by one tenth of a percentage point from 6.3% for September to 6.2%, while in absolute terms the ranks of the jobless shrank by 87,400 to reach 2.76m.

Unemployment claims meanwhile fell by 35,000 (consensus: -5,000) and September's drop was revised from -8,000 to -10,000.

Claus Vistesen at Pantheon Macroeconomics described the rate of improvement as "sizzling", pointing to lead indicators published by the Federal Labor Agency which he said confirmed that the improving trend was indeed "real".

That said, such a large drop in claims could in part be the result of changes in how workers are classified or it might be revised down a tad next month.

Nonetheless, according to the IFO institute, roughly 3.0m German workers, or 7% of the workforce, were still on furlough and now pandemic lockdowns were set to tighten.

"We have to assume that the encouraging trend in the headline labour market data is now in peril, though the job-retention scheme remains in effect, so overall unemployment likely will be little affected," he concluded.

"In addition, manufacturing is still improving, which should support the labour market through Q4."