“The German economy is currently experiencing a period of weakness, but the labour market remains unfazed by this,” the head of the Federal Labour Agency, Frank Weise, said.

Recent data showed that the German economy, the biggest in Europe, contracted by 0.2 percent in the fourth quarter of 2011 and the latest output and orders data suggest little improvement can be expected in the first quarter, Weise said.

“On the other hand, forward-looking indicators suggest the economy could stabilise during the course of the year. The improvement on the labour market is continuing,” he said.

The year-on-year comparison showed that there were 550,000 more workers in February than in the same month last year, an increase of 1.4 percent. There was also a slight improvement in the monthly statistics, with some 33,000 more workers than in January.

In total, some 41.1 million Germans currently have jobs.

At the same time, new figures show unemployment in Germany sank by 9.8 percent to 2.49 million over the past year. There were 271,000 fewer unemployed in Germany than a year.

Unemployment tends to fall in the spring as sectors such as the construction sector take on workers again with the end of the cold winter weather.

But even seasonally-adjusted numbers, which iron out such distortions, declined in March from February and the seasonally-adjusted jobless rate eased to 6.7 percent, compared with 6.8 percent in February.

“Despite the contraction in fourth-quarter gross domestic product, the German economy remains relatively resilient versus its eurozone peers and the labour market is continuing to benefit from exceptionally effective structural reforms,” said Newedge Strategy analyst Annalisa Piazza.

Indeed, the rosy picture was set to continue for the next few months, Piazza predicted.

And even if the decline in unemployment was unlikely to continue at the same pace, with business surveys clearly pointing to some moderation in companies’ hiring intentions, “sideways moves will not have to be interpreted as a sign of stagnation as the unemployment rate is at record lows,” the economist said.

“The German labour market remains rather resilient to the soft patch of the economy at the end of last year,” agreed ING Belgium economist Carsten Brzeski.

The Local/AFP/bk