German unemployment surprises to the downside in December

Germany's labour market continued to exhibit resilience last month, possibly due in part to companies' reluctance to lay off workers.

According to the Federal Labor Agency, in seasonally adjusted terms the country's rate of unemployment declined from 5.6% for November to 5.5% in December.

That was better than the 5.6% rate penciled in by economists.

Jobless claims also surprised to the downside, falling by 13,000 after a 17,000 person rise in November and versus a consensus forecast of 15,000.

Commenting on the latest numbers, Claus Vistesen, chief Eurozone economist at Pantheon Macroeconomics, pointed out how seasonal adjustment factors depressed the claims tally and the fact that job openings also declined towards the end of 2022.

"That said, these headline numbers are encouraging all the same. The seasonally adjusted fall in claims at the end of 2022 could be the first signs of a reversal from the refugee-driven overshoot earlier in the year," he added.

"More likely what we are seeing is underlying resilience in the labour demand, and a reluctance to lay off workers, in the face of the energy price shock and slowing economic activity."