Unemployment in Germany unexpectedly declined this month as the manufacturing industry regained footing while the trade stress, which prevented stifled exports growth, eased.

The report said that the number of unemployed fell by 16K, compared with an estimated increase of 6K. The unemployment rate remained near record low at 5%. Reduced number of unemployed is good news for the economy, curbing negative expectations after the data on Friday showed a sharp drop in retail sales.

Statistics for this month showed a jump in factory orders and a slight increase in business confidence. This justifies the statement of the government, that there is no reason to deviate from its balanced budget, which was agreed by the president of Bundesbank, Jens Weidmann.

The slew of positive news is good for the Euro since problems with the biggest EU economy promised more fiscal and monetary response, i.e. permanent and temporary increases in money supply.

Manufacturers have announced cuts in more than 80,000 jobs this year, led by car manufacturers such as Volkswagen AG struggling with the switch to electric cars and electronics manufacturers such as Siemens AG, who have been hit by weakened global trade.

The employment agency said demand for new labour has declined. The problem is that job losses will reduce private spending, which has supported the economy in recent quarters and helped prevent a recession this year.

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