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Germany’s labor-market recovery continued at a slower pace in September amid fading momentum in the country’s reopening boom. 

Unemployment in Europe’s largest economy fell by 30,000 this month, less than economists expected. That kept the jobless rate at 5.5%.

Forecasts for German growth have been cut in recent weeks as businesses are grappling with stubborn shortages of parts and raw materials. The issue grew even more acute in September, when more than 77% of German manufacturers reported facing such problems, according to the Ifo institute. 

Services are meanwhile continuing their rebound from coronavirus shutdowns, although momentum has moderated somewhat. Consumers have so far shrugged off concerns about rising energy prices and are optimistic that virus infections in the autumn can be held at bay. 

With industry reporting full order books and private spending supporting retailers and hospitality, furloughed workers are increasingly returning to their jobs. According to Ifo, the number of people on state wage support fell to less than 700,000 last month, down from a pandemic peak of about 6 million in April 2020. 

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