German employment reached a post-unification high in 2007 with 39.7 million people in work, and 650,000 more people holding jobs than in the previous year.
The data is further evidence that Europe's largest economy has shaken off its torpor of recent years. The federal statistics office said: "The positive effects of economic recovery above all had an impact on jobs fully subject to social insurance contributions."
The good news appears to be continuing into the new year: German national carrier Lufthansa has plans to hire 4,300 new workers this year; carmaker Audi will create 800 new jobs.
Germany's Chamber of Industry and Commerce (DIHK) has said that industrial production rose 7 per cent last year, with another 4 per cent forecast this year. "Around 100,000 extra jobs will be created in the industrial sector in 2008 as in 2007," said DIHK economist Volker Treier in a newspaper interview.
"The last time we had a similarly good situation was at the time of reunification."
German companies anticipate a 7 per cent rise in exports and are hoping that consumers will start to spend again after disappointing Christmas sales.
Nevertheless, German employers are anxious to find a dark lining to the silver cloud. They have tried to neutralise increasing demands for a statutory minimum wage and are getting nervous ahead of looming wage negotiations.
After years of wage restraint, services union Verdi is calling for a wage hike of 8 per cent for its 1.3 million members. IG Metall, the influential metalworker and engineering union is seeking a similar deal, while chemical industry unions want 7 per cent.
"Clearly 2008 will be a mega year for wage deals," said Berthold Huber, head of IG Metall. "It can't be right that stock prices rise, dividends rise and manager salaries rise, and that employees end up with plus-minus zero."
Senior German politicians have urged companies to placate public anger at manager pay packets with generous pay deals this year.
Last month, chancellor Dr Angela Merkel used her annual address to Germany's leading employer organisation to attack manager "payouts in the realms of fantasy".
That has made Dr Merkel unpopular with business leaders and economists who, in return, accuse her of increasingly anti-business attitudes and a dwindling reform zeal.
