Germany's unemployment decreased more than expected in June as restrictions related to the coronavirus pandemic were relaxed, data from the Federal Labor Agency revealed on Wednesday.

The number of people out of work declined 38,000 in June from the previous month, much bigger than the expected fall of 20,000. Unemployment had decreased 19,000 in May.

The unemployment rate remained unchanged at 5.9 percent in June, in line with expectations.

"Unemployment and underemployment continued to fall sharply," said Federal Employment Agency CEO Detlef Scheele. The companies are further reducing short-time working and are looking for new staff again."

Elsewhere, the labor force survey published by Destatis showed that the unemployment rate dropped marginally to an adjusted 3.7 percent in May from 3.8 percent in June. On an unadjusted basis, there were 1.56 million people unemployed in May, down 54,000 from the previous year. The jobless rate stood at 3.6 percent versus 3.9 percent a month ago.

The seasonally adjusted number of persons in employment rose slightly by 25,000, or 0.1 percent in May compared with the previous month. However, the number of persons in employment was still markedly below the pre-crisis level.

At first glance, today's numbers suggest that the German labor market has already left the crisis behind, Carsten Brzeski, an ING economist, said. At second glance, however, the high number of short-time workers should still be a good reminder of potential risks going forward, even if these risks look less threatening by the month.

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