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Unemployment drops record low in Germany despite influx of migrants

Germany’s May unemployment hit record low, despite a huge influx of migrants in to the Eurozone’s largest economy, signaling that the strongest labor market still persist in the country.

German jobless claims fell more than expected in May and the jobless rate hit a fresh record low, data from the BA labor agency showed Tuesday. Despite a record influx of migrants into Europe's largest economy, jobless claims in May dropped for the eighth consecutive month, falling by 11,000 from April, adjusted for seasonal effects, data showed.

Germany's adjusted unemployment rate dropped to 6.1 percent, the lowest level since the beginning of the data series in January 1992.

"Employment has grown strongly and demand for labor has risen markedly," said Frank-Juergen Weise, Head, BA.

The immigration has not yet hurt Germany’s labor market since the new arrivals will take time and space to sink in to the labor market, both in terms of education & qualifications as well as language. This is likely to spur the nation’s unemployment, both absolute as well as relative.

But a strong labor market has so far has underpinned household consumption and wage growth here. Germany's economy grew at a quarterly rate of 0.7 percent in the first three months of the year, pushed by solid domestic demand.

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