Good news regarding unemployment in Germany helped to push the euro higher against the US dollar.
The number of Germans unemployed in August fell by 17,000 to 3.19 million, with the jobless rate unchanged at 7.6%. Bloomberg's survey of economists had predicted a drop of 20,000. The news indicates that Germany's export surge continues, with companies such as Daimler and BMW continuing to add workers to their payroll as European exporters benefit from a weak euro that has made their products more competitive abroad. The unemployment rate in the wider eurozone was unchanged at 10% in July, with 15.833 million people, indicating that strong economic growth in the second quarter of the year has yet to result in the creation of a significant number of new jobs. Businesses remain cautious about the permanence of the global economic recovery, and have remained reluctant to add workers in case of a double-dip recession. Also holding steady in August was eurozone inflation, which increased by 1.6% as companies cut costs in a bid to shore up their earnings figures. ABN Amro cautioned that domestic pricing pressures would remain weak and that the labour market would stay fairly flat for the time being; until these elements improve, consumer demand is likely to remain weak.
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