The labour market remains tight but still lost some further ground in April. Following a larger revised 19,000 increase in March, joblessness climbed 24,000 to 2.57 million. The latest rise was small enough to leave the unemployment rate unchanged at 5.6 percent and so in line with the market consensus but still indicates that the demand for labour is on the wane.

Indeed, vacancies extended their trend decline, this month falling 8,000 after a 10,000 slide last time.

Today's report puts the German ECDI at 2 and the ECDI-P at 13. Economic activity in general is performing much as expected although the real economy is running just a little hotter than generally forecast.

Unemployment in April is expected to hold steady at 5.6 percent.

The unemployment rate is calculated by the Federal Employment Agency based on the number of unemployed persons as a percentage of the number of all civilian members of the labour force (dependant civilian employed persons, the self-employed family workers and unemployed). Unemployed is defined as persons who between the ages of 15 and 65 and who are without employment or only with short-time employment (currently less than 15 hours per week) and seeking an employment of at least 15 hours per week subject to compulsory insurance.

A snag to understanding German unemployment data comes from the fact that there are several measures of unemployment available. Unemployment rates calculated by the Bundesbank are preferred but some German analysts check the unadjusted rates as well. And then there are still different rates for unemployment that are used by Eurostat to compute their unemployment rate. The spread between the Bundesbank rates and Eurostat can be quite significant. The reason for the often sizeable differential is found in the interpretation of the ILO definition.

Unlike in the U.S. no wage data are included in this report. But by tracking the jobs data, investors can sense the degree of tightness in the job market. If labor markets are tight, investors will be alert to possible inflationary pressures that could exist. If wage inflation threatens, it's a good bet that interest rates will rise; bond and stock prices will fall. No doubt that the only investors in a good mood will be the ones who watched the employment report and adjusted their portfolios to anticipate these events. In contrast, when job growth is slow or negative, then interest rates are likely to decline - boosting up bond and stock prices in the process.