The number of Germans out of work fell by a larger-than-expected 36,000 in October, helped by a moderate economic recovery, state-sponsored jobs and mild weather.
After a statistical blip pushed the jobless total higher in September, the drop in seasonally adjusted unemployment resumed in October, dipping to 4.801 million, or a rate of 11.6 per cent.
Economists attributed the better-than-expected figures to a combination of factors, including the government's "Hartz IV" labour market measures which have increased the number of low-paying, part-time jobs but have yet to spark a noticeable rise in full-time work on normal terms.
"(The decline) is a reflection of the moderate economic recovery having a first impact on the jobs market. One can see that in the clear increase in the number of open jobs this year," said Alexander Koch of Hypovereinsbank.
Experts believe October will mark the last fall in the headline, or unadjusted, figure before the usual winter rise.
The "Hartz IV" labour market changes introduced at the start of the year, including benefit cuts and the inclusion of people not previously counted, have made interpreting the jobless figures a statistical headache. But other recent indicators have been positive.
Manufacturing employment improved for the first time in over a year in October, as increasing output and new orders encouraged firms to raise capacity, according to the RBS/BME survey of purchasing managers released on Tuesday.
German business confidence rose to a five-year high in October amid signs of a revival in domestic demand, and consumer sentiment was also set to improve in November due to a growing belief in economic revival, according to figures last week. Yet forecasts for growth in Europe's largest economy remain modest.
The government last month cut its growth estimates for this year and next to 0.8 and 1.2 per cent respectively. Many economists believe those rates are too weak to generate a substantial turnaround in the labour market. "The problem is still the weak domestic economy. We don't see anything more than a moderate recovery," said Bernd Weidensteiner of DZ Bank.