BERLIN (dpa-AFX) - Germany's unemployment decreased less-than-expected at the start of the year, but the jobless rate held steady at a record low, and retail sales declined unexpectedly in December, presenting a mixed picture of the biggest Eurozone economy that is facing risks from global trade tensions, Brexit, automobile industry troubles and a China slowdown.
The seasonally adjusted number of unemployed dropped by 2,000 month-on-month in January, preliminary data from the Federal Labor Agency showed on Thursday.
Economists had expected a fall of 10,000 persons. In December, unemployment dropped by a revised 12,000.
On an unadjusted basis, the number of unemployed grew by 196,000 persons monthly to 2.406 million.
The seasonally adjusted jobless rate was a record low 5 percent in January, unchanged from November and December.
'Unemployment and underemployment have risen as usual in January,' Detlef Scheele, the chief executive officer of the Federal Employment Agency, said at a press conference in Nuremberg.
Earlier on Thursday, the Federal Statistical Office reported that there were 1.34 million unemployed in December, down 70,000 from November.
After adjustments, the jobless figure decreased 14,000 month-on-month to 1.41 million. The ILO unemployment rate was steady at 3.3 percent in December.
Employment grew by 1.1 percent year-on-year, or by 494,000 persons, to 45 million.
'The German labor market remains an impressive engine for the entire economy, currently defying all external downside risks and uncertainties,' ING economist Carsten Brzeski said.
'At least for the time being, there is very little reason to see the last, rather stubborn, stronghold of the economy falling.'
Despite a strong labor market and slowing inflation, German households reined in their spending at the end of last year, figures from the statistical office showed on Thursday, as they grew concerned about the economic outlook.
Retail sales fell 2.1 percent year-on-year in December, after a 1.9 percent increase in November. Economists were looking for a 1.5 percent gain.
The latest decrease was the biggest since a 3 percent slump in September.
Survey data from the market research group GfK released on Wednesday showed that German households assessed the general economic outlook less optimistically for a fourth straight month.
The GfK survey revealed that Germany's consumer confidence is set to strengthen in February, defying expectations for a modest easing, as households' income expectations and propensity to buy improved further.
Headline inflation eased to an eleven-month low of 1.4 percent in January, while the harmonized figure held steady at 1.7 percent, preliminary estimates revealed on Wednesday.
Official data showed that sales of food, beverages and tobacco decreased 1.5 percent and non-food sales shrunk 2.7 percent. Internet and mail order sales also declined in December, down 0.6 percent.
The monthly decline was much worse than economists had forecast.
After seasonal and calendar adjustments, retail sales tumbled 4.3 percent from November, when it grew a revised 1.6 percent. Economists had expected only a 0.5 percent fall.
For the full year 2018, retail sales grew 1.2 percent, expanding for a ninth year in row. In 2017, sales had grown just 0.1 percent.
The German economy likely avoided a technical recession in the fourth quarter, the economy ministry has said. The manufacturing sector is also expected to pick-up steam once the dampening impact from the implementation of the WLTP emission tests gets over.
The GfK has predicted an increase of 1.5 percent in private consumption in Germany this year.
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