German economy creates more jobs, but employment growth slows

BERLIN (Reuters) - More people joined the German workforce over the summer months, but the rate of job creation slowed slightly compared with previous quarters, data showed on Thursday, suggesting domestic support for growth in Europe's biggest economy could weaken.

The economy is increasingly dependent on strong domestic demand to drive growth and offset weakness in foreign trade. A steady rise in employment levels, rising real wages and low interest rates are propelling household spending.

In the three months through September, 388,000 people joined the workforce, increasing it by 0.9 percent on the year to 43.7 million, data from the Federal Statistics Office showed. The increase was driven mainly by the services sector.

This marked a slowdown from job growth of 1.2 percent in the second quarter and 1.3 percent in the first, and mirrored a wider economic slowdown over the summer months.

The economy lost steam in the third quarter with overall gross domestic product growth halving to 0.2 percent from 0.4 percent in the three months through June due to a drop in exports, data showed on Tuesday.

Analysts expect the economy to end the year on a stronger note, though some are worried about the longer-term outlook for exports in the light of protectionist campaign promises by U.S. President-elect Donald Trump.

The government expects growth of 1.8 percent in 2016, slowing to 1.4 percent in 2017 on sluggish foreign trade.

(Reporting by Michael Nienaber; Editing by Hugh Lawson)

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