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German jobless rate slows
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March 6, 2002: 6:34 a.m. ET
Unemployment in Europe's largest economy remains flat in February as economy recovers
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LONDON (CNN) - German unemployment remained basically flat in February as Europe's biggest economy showed more signs of recovery.
The jobless number rose by a lower-than-expected 1,000 last month to a seasonally adjusted 3.979 million from 3.978 million in January, the Federal Labour Office said on Wednesday. The unemployment rate was unchanged at 9.6 percent in February.
On an unadjusted basis, the jobless figure edged up by 6,200 to 4.296 million in February, also lower than economists had anticipated.
Despite the improved employment picture, the Labour Office warned that the figures still do not point to a sustained rebound in the job market.
"While leading indicators point to a future economic recovery, this is not being felt on the labour market, where employment and joblessness are lagging indicators," the office said.
"Joblessness on a seasonally adjusted level ceased to increase but this is likely to be mainly due to the relatively mild weather."
However, the better-than-expected February jobless number should come as welcome news to the Social Democrat-led government of Chancellor Gerhard Schroeder.
Schroeder, who came to office with a pledge to reduce unemployment to 3.5 million during his term in office, will have his economic performance judged in September's general election.
The positive jobless report follows other recent economic data that have pointed to a recovery.
Germany's business confidence rose for the fourth consecutive month in February. A key economic barometer, the Ifo monthly survey of 7,000 companies, rose to 88.7 from 86.3 points in January.
Ifo said the jump in business confidence shows Germany's battered economy, which slipped into recession last year along with the U.S. and Japan, had bottomed out.
The German Finance Ministry said last month that it expected the economy to grow by 3 percent next year for the first time since 2000. Growth this year is likely to be around 0.75 percent, compared with 0.6 percent in 2001.
Inflation has also been easing. The preliminary national figure for February is expected to show a fall in the year-on-year rate to around 1.8 percent from 2.1 percent in January, when prices jumped due mainly to higher taxes and increased costs for fresh food.
In 2001, the rate reached a peak of 2.4 percent, up from 2.1 percent the previous year and 0.6 percent in 1999.
"It is clear that the economy is recovering as leading indicators have improved sooner and stronger than expected," Stefan Muetze, an economist at Helaba Bank, told Reuters.
"The wave of corporate lay-offs will lose momentum, once companies look ahead to an economic upturn." 
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