Berlin - German unemployment fell more than expected in October, defying the economic gloom facing the nation, data released Thursday showed.

After dropping by 29,000 in September, seasonally adjusted unemployment fell by another 26,000 to 3.151 million in October, Germany's Federal Labour Office said.

Analysts had expected the numbers out of work in Europe's biggest economy would drop by 10,000 in October amid signs Germany's labour market has so far managed to escape the fallout from the financial crisis triggered by the global credit crunch.

However, economists believe that the German labour market still reflects the strong economic growth rate that the nation posted at the start of the year and predict that the nation's economy will contract as a global economic downturn takes hold.

Based on the more politically important seasonally unadjusted data, German unemployment fell 84,000 in October to below the key 3 million level to 2.997 million. This was 
437,000 more than in the same month last year.

The drop brought the unadjusted jobless rate down from 7.4 per cent in September to 7.2 per cent in October. Unemployment stood at 8.2 per cent a year ago. (dpa)