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Last Updated: Wednesday, 31 August 2005, 11:36 GMT 12:36 UK
German jobless total falls again
Germans queuing in a job centre
Unemployment lines have stopped getting longer in Germany
German unemployment has fallen for a fifth month, giving the government some good news ahead of a general election.

The number of Germans out of work fell by 12,000 to 4.796 million in August, the Federal Labour Office said. The unemployment rate was steady at 11.6%.

When not adjusted for seasonal factors the picture looked better, with jobless numbers down by 44,000 to 4.728 million, and the rate sliding to 11.4%.

Job creation is likely to be one of the key issues in next month's election.

While Germany's unemployment rate is sitting stubbornly above 11%, in France it has fallen to its lowest level in two years, government figures showed on Wednesday.

France's jobless rate declined to 9.9% in July as the number of people looking for work dropped by 25,600 to 2.42 million.

Mixed picture

The comparisons with other European Union members are taking their toll on the government of Chancellor Gerhard Schroeder.

Commentators and opinion polls have been predicting defeat for Mr Schroeder, with many voters unhappy about the state of Germany's economy.

That is the strongest decline in unemployment in the month of August in Germany in the last 10 years
Wolfgang Clement, Economy Minister

Mr Schroeder came to power on a promise to boost growth and cut unemployment to as low as 3.5 million. His critics say that he has failed to deliver and put the improving employment figures down to a change in how they are calculated.

The problem facing the government is that recent economic reports are showing a mixed picture of Europe's largest economy.

A retail sales report on Wednesday showed that retail sales unexpectedly dropped in July, the fifth decline in six months.

At the same time, an earlier snapshot of consumer sentiment showed that shoppers were more optimistic about their prospects.

'On the decline'

Germany's government defended its record and said it still expected the economy to grow by 1% this year - a target it may top despite the record oil prices.

Speaking about unemployment, Economy Minister Wolfgang Clement said that it "remains on the decline".

"Forty-four thousand less in August - that is the strongest decline in unemployment in the month of August in Germany in the last 10 years," he explained.

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