(RTTNews) - The German jobless rate in September decreased to its lowest level in sixteen years despite economic slowdown and tensions in the financial markets.

Tuesday, a report from the Federal Labor Office showed that the jobless rate fell to 7.6% in September from 7.7% in August which was revised up from 7.6%. The September jobless rate matched economists’ expectations.

At the same time, the number of unemployed people, adjusted for seasonal variations, decreased 29,000 to 3.177 million in September. This was higher than the expected fall of 15,000. In August, the decrease was 39,000, revised down from 40,000 fall previously reported.

Economist at the BNP Paribas Economic Research Fr�d�rique Cerisier said the data released today illustrate how modest was the slowdown of employment so far, compared with the deceleration of activity.

Cerisier added the correction will be much more substantial in the coming months, and will break a three-year long decrease in the unemployment rate.

Analyst at the Commerzbank Economic & Commodity Research, Eckart Tuchtfeld said the good results in German labor market can only be a matter of time before it too is hit by the economic slowdown.

Tuchtfeld noted that the rapid adjustment to economic fluctuations can in fact be expected in some segments - but not on any scale that would have a real quantitative impact. Further, the Commerzbank analyst said seasonally-adjusted unemployment will probably start to rise over the course of the winter.

The German economy had contracted in the second quarter for the first time in almost four years on reduced investment in construction as well as machinery and equipment and a slump in household spending. The economy contracted 0.5% sequentially in the second quarter, after expanding 1.3% in the first quarter.

Earlier in the day, the Federal Statistical Office has reported that Germany’s ILO jobless rate eased to 7.2% in August from 7.3% in July. Economists had expected the rate to remain unchanged at 7.3%. A year ago, the rate was 8.3%.

According to provisional estimates, the number of unemployed was 3.10 million in August, down 470,000 or 13% year-on-year after adjusting for seasonal variations.

Meanwhile, the number of persons in employment whose place of residence was in Germany, was 40.27 million, an increase of 558,000 or 1.4% over the previous year.

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