Von der Leyen told an unscheduled press conference the number of unemployed in Europe’s biggest economy fell to 2.945 million this month from 3.031 million in September, finally breaching the symbolically important three million level.

The figure of 3.031 million is unadjusted for seasonal and calendar effects but is the one that serves as the basis for public debate.

Von der Leyen said that the unadjusted unemployment rate fell to 7.0 percent

in October from 7.2 percent in September.

In seasonally-adjusted terms, the rate remained at 7.5 percent, slightly higher than a forecast of analysts compiled by Dow Jones Newswires.

The full employment report will be released by the Federal Labour Office on Thursday.

Berlin now forecasts an average of 2.9 million unemployed workers in 2011, compared with 3.2 million for 2010.

Earlier this year, economists had expected the jobless rate to rise, with some estimating it could climb as high as four to five million people. But after being slammed by the global economic crisis, Germany’s export-oriented economy bounced back thanks in large part to demand from emerging countries for high-quality German goods.

That has allowed companies to begin hiring again – a new problem now for German firms is the lack of skilled workers, especially in technology-intensive sectors.

While some have begun to speak of a German jobs miracle, UniCredit economist Andreas Rees said: “There is no need to believe in supernatural forces.

“Instead, a mixture of crisis measures undertaken by the German government and structural reforms on the labor market really paid off.”

The steady improvement in unemployment has begun to feed into a virtuous circle, with consumer confidence rising and a pick-up in domestic demand, which has long been the economy’s weak spot.

That should make Germany less vulnerable to an anticipated easing in global economic growth, experts say.

In October and November 2008, the number of unemployed in Europe’s biggest economy briefly dipped below the widely-cited three million level before heading higher as a result of the global economic crisis.

The last time the number remained below three million for any length of time was in 1992, a couple of years after the country was reunified.

“The German labour market is currently making the best of the upswing” in emerging economies, Rees said.

“According to our calculations, more than half of the newly added jobs stems from the hiring of temporary workers.”

AFP/mry