FRANKFURT: Unemployment in Germany held steady in December, as the labour market remains in good shape, boding well for consumption in Europe's biggest economy this year, official data showed on Tuesday.
In headline terms, the number of people claiming unemployment benefit in Germany increased by 66,640 to 2.873 million in December, the federal labour office announced in a statement.
That pushed the unemployment rate -- which is the number of people out of work measured against the total of all people in jobs or available for work -- up to 6.7 percent from 6.5 percent the month before.
But the increase was solely due to seasonal factors, such as lay-offs during the Christmas period.
Adjusted for that, the number of people registered as unemployed in Europe's top economy actually fell by 15,000 to 2.965 million last month.
And the seasonally-adjusted jobless rate was unchanged at 6.9 percent.
"Developments on the labour market are very stable," labour office chief Frank Weise said, insisting the labour market was in "fundamentally good shape."
Taking the year as a whole, the German jobless total rose by 53,000 to 2.950 million, and the jobless rate edged up to 6.9 percent in 2013 from 6.8 percent in 2012, the labour office said.
But the decline in the jobless numbers for December alone was welcomed by analysts, especially after better-than-expected retail sales data earlier.
German shoppers seemed surprisingly keen to spend in November, the federal statistics office Destatis calculated.
Retail sales, a closely watched measure of household confidence, increased by 1.5 percent in adjusted terms in November.
Analysts had been pencilling in a more modest increase of 0.6 percent.
"More good news for German consumers: after a solid retail sales report for November, a robust jobs report for the end of the year provides further support for a strong finish to 2013 from consumer spending," said Berenberg Bank economist Christian Schulz.
He estimated that the drop in the December jobless total was the biggest monthly fall in two years and the first since July.
"Strong labour market data raise the chances of stronger wage growth in 2014 and thus higher consumption. Less unemployment also further alleviates the burden on the public purse and thus opens up room for more public investment as agreed by the new grand coalition government," Schulz said.
While the expert noted that the retail sales data were volatile and subject to frequent revision, "a strong Christmas shopping season could still round off what otherwise looks like a fairly strong quarter for the economy," Schulz said.
"Given the strong fundamental position of German households with low debt, rising incomes, low unemployment and low inflation, consumption should remain a robust contributor to German growth in 2013 and beyond," he concluded.
Natixis economist Johannes Gareis also took heart from the jobless data.
"All in all, by remaining solid like a rock in 2014, the labour market will play a significant role in driving Germany's domestic economy, especially private consumption," Gareis said.
Postbank economist Heinrich Bayer found that "given the very weak state of the economy at the turn of the year, the German labour market held up very well."
Indeed, "in view of the sharply improved economic outlook, we expect the labour market to continue to develop positively in 2014."
Bayer projected a drop in the annual average unemployment rate to 6.7 percent this year "and it could even fall to 6.5 percent at the end of the year."
"The situation on the German labour market brightened further in December," said BayernLB economist Christiane Berg.
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