German employment levels hit a new record but an unexpected fall in retail sales puts another dampener on hopes that a consumer-led upswing will continue full-steam ahead. Ciara Lee reports.
More bumps for Germany as it navigates its way towards a new ruling coalition ... Mixed data on Friday shows the jobless rate at a new record in September. At just 5.6 percent, it's the lowest level in around 27 years But retail figures weren't so impressive. Sales unexpectedly fell 0.4 per cent in August, putting a dampener on hopes that a consumer-led upswing will continue at full steam. And putting the ECB back in focus. (SOUNDBITE) (English) GLOBAL FINANCIAL ECONOMIST, COMMERZBANK, PETER DIXON, SAYING: "Of course there's still an awful lot of monetary stimulus coming through from the ECB. So I think for some time to come the economic data out of Germany will continue to be strong." The case for only gradual removal of stimulus bolstered by the latest euro zone inflation numbers. They undershot expectations in September - with an overall rate of 1.5 per cent - still way below the ECB target. On the political front, meanwhile, a new poll shows 59 percent of Germans want a three-way coalition of Merkel's conservatives, the pro-business Free Democrats and the environmentalist Greens. As the country searches for a new government after last Sunday's election. (SOUNDBITE) (English) GLOBAL FINANCIAL ECONOMIST, COMMERZBANK, PETER DIXON, SAYING: "In terms of the economy post election again I don't think there's an awful lot to worry about because we still have Angela Merkel as chancellor. Yes there will be a certain amount of horse trading around the coalition building but I don't think that will necessarily derail the economy to any great extent." And the overall outlook remains bright. Growth forecasts this week were hiked to 1.9 percent this year and 2 percent next year Amid predictions of record budget surpluses over the next two years.