FRANKFURT, Germany — The number of unemployed in Germany unexpectedly fell in November while retail sales grew, official data showed yesterday, suggesting recovery in Europe’s largest economy is on track.

The Federal Labor Office said the German unemployment rate narrowed by 0.1 percentage points from October to 7.6 per cent. A total of 3.22 million people were out of work in November, down from 3.23 million in October.

Economists had expected the November level of unemployed to increase.

“After about a year of the economic crisis, the employment market is comparatively robust,” said Frank-Juergen Weise, the Labour Office director, adding that the effects of unemployment on the economy was far less dramatic than many had expected.

Compared to November 2008, the level of unemployed rose by 227,000 for the month.

The Labour Office said about 100,000 workers at around 5,000 companies were put on shorter hours in November. The office estimated the total number of workers taking part in short time work programmes stood at about one million in November, largely unchanged from the previous month.

Such programmes have been partly subsidised by Chancellor Angela Merkel’s government in an effort to keep people in jobs.

“It is no secret anymore, earlier reforms and, above all, subsidised short-term work have made the labour market more crisis-resistant than during earlier recessions,” Carsten Brzeski, an ING economist said in a research note.

“The strong labour market performance is impressive but it is no new German job wonder, yet. Looking ahead, unemployment will continue to increase until 2010. However, with the improving economic outlook, gradually filling order books and increasing demand for new labour, it looks as if the threat of exploding unemployment rates has been avoided,” Brzeski said.

In a separate report, the Federal Statistical Office said German retail sales for October fell 1.7 per cent from a year ago. The office said retail sales rose 0.5 per cent from September.

The office said sales of food, beverages and tobacco fell two per cent compared with October 2008, while non-foods sales fell 1.2 per cent.

Sales of textiles, shoes and leather goods rose 5.2 per cent on the year, while furniture, household goods and building supplies rose 0.8 per cent.

“Finally some signs of life,” Brzeski, at ING said.

“Looking ahead, Christmas sales could give another boost to retail sales,” he added. “However, looking beyond Christmas sales, the outlook seems rather bleak. Consumer confidence has weakened in recent months and increasing unemployment could dent the last spark of hope for a spending spree.”