German unemployment fell by more than expected in January, with the jobless rate sinking to a new record low, pointing to steady growth in Europe's largest economy despite an economic slowdown in emerging markets. Sonia Legg reports.
They've been building a better economy for 10 years and they're reaping the rewards German unemployment is at record lows after falling unexpectedly to 6.2 percent in January. It's been nearly double that in the recent past. Simon Smith is from FXPro. (SOUNDBITE) (English) FXPRO, HEAD OF RESEARCH, SIMON SMITH, SAYING: "They were very smart - they introduced labour market reforms 10 years ago - that kept the labour market competitive and helped them during the global financial crisis in terms of having a competitive labour base and also in terms of finding their niche, they were able to increase their exports to China and find a niche there." It's a sharp contrast to Spain where one in five is out of work - unemployment there actually rose again in January after falling in recent months. In Italy the jobless rate was stable at 11.4 percent. And other data is also adding to worries over the euro zone's recovery. Prices at factory gates across the region fell more than expected in December. (SOUNDBITE) (English) FXPRO, HEAD OF RESEARCH, SIMON SMITH, SAYING: "The recovery is there but I would not say it is strongly established and the worry is that the ECB is reaching the limits of its policy options." The influx of migrants - 1.1 million arrived last year - is helping Germany's economy. So is low inflation and rising wages - that's fuelling domestic spending at a time when orders from emerging markets are slowing. But its critics say the euro zone can't rely on Germany entirely - and must carry out its own structural reforms however painful.