More jobs in Germany

The number of people without work in Germany dropped to 2.963 million in April, the Federal Employment Agency (BA) in Nuremberg reported on Wednesday. It was the first time this year that the unemployment rate sank to 7.0 percent, below the psychologically important three-million threshold.

The April figures showed 65,000 people more in employment than in March 2012, and 115,000 more year-on-year. More jobs became available particularly in the building sector as well as in agriculture and the outdoor catering trade with warmer weather setting in.

But analysts warned that the April pick-up was due mostly to seasonal factors, rather than driven by cyclical developments. Commerzbank Economist Eckart Tuchtfeld said the improvement on the labor market in April had not been as marked as in previous years.

All is not gold

"The economic recovery isn't such a strong driver any more, and we still feel the repercussions of the weak final quarter in 2011," Tuchtfeld told the DPA news agency.

While warning against reading too much into the figures for just one month, Deutsche Bank analyst Steffen Schneider argued that with economic growth expected to be only very moderate this year, many companies across Germany were hesitant to hire new employees.

"Many firms aren't making any long-term recruitment decisions right now and prefer to wait and see how economic developments will pan out," Schneider said in a statement, adding that he sees the domestic labor market stagnating at least in the first half of the current year.

hg/gb (dpa, dapd)