Unemployment rate and consumer prices paint a positive picture of the German economy on Friday

The German Federal Employment Agency released the unemployment report on Friday. The data suggested the German unemployment to have declined for the second straight month in February. According to experts, Friday’s data hints at the labor market’s refusal to submit to the rising pressures from the rapid spread of Coronavirus and the weakness in the manufacturing sector.

Friday’s unemployment report wasn’t the only one that stirred optimism in the largest European economy as earlier in the week, German business sentiment was also reported to have remained unchanged despite the Coronavirus threatening to become a pandemic.

German Unemployment Rate Records At 5% In February

While the economy was confronted with major challenges towards the end of last year, February’s data suggests potential for recovery in the first half of 2020. At 2.26 million, the count of jobless people in Germany declined by a massive 10K in February. Economists had anticipated a decline to be capped at only 4.5K this month. The 5% unemployment rate in February was also reported to be approaching a record low.

Despite the earlier complications for German exporters that stemmed from trade tensions and the current challenges of supply chain disruptions posed by the Coronavirus, the German labor market has remained resilient since the start of this year.

In separate news, the Federal Statistical Office of Germany also announced the preliminary monthly figure for consumer prices on Friday. The data highlighted a 0.4% growth in the German Consumer Price Index (CPI) in February. In terms of year over year gain, the increase was noted at 1.7%. The CPI is a reliable indicator to get an insight into inflation and is actively used across the globe.

Response In The Forex Market

German CPI printed a 0.6% decline in January while the analysts had anticipated a 0.3% improvement in February. Friday’s economic data also highlighted a 0.4% decline in German import prices in February versus a 0.2% gain in January and 0.1% expected.

The forex market remained undecided on Friday with the EUR/USD currency pair climbing as high as 1.1051 in the middle of the day. The pair later dropped a 100 pips to 1.0951 level. Much of the loss, however, was recovered towards the end of Friday with the pair have surged again to over 1.1040. EUR/USD closed the last week above 1.10 level at 1.1021 in the forex market.