Analysts are doubtful whether the positive trend can continue

Companies added 75,000 jobs this month taking the seasonally-adjusted jobless rate to 3.3 million - the lowest level since 1992.

The figures showed that the labour market remained robust even as a US slowdown and high energy costs is raising fears about the economy.

The International Monetary Fund cut its 2008 German growth forecasts this week.

The IMF now expects the German economy to grow by 1.5%, sharply lower than the 2% previously estimated.

Tipping point?

Another worry is that the strong euro will hurt demand for exports from the US as many firms that rely on overseas sales, including carmaker BMW and Airbus plane maker firm EADS, must pay their costs in euros, while taking their profits in US dollars.

The euro climbed to $1.50 for the first time this week and some analysts believe that the currency could rise further on the expectation that the US central bank, the Fed, will cut rates below 3% - making the US currency a less attractive investment.

Observers were surprised at the strength in the labour market, but some were sceptical whether the trend could continue.

"This is better than expected. It indicates that the labour market continues to gather momentum," said Bernd Weidensteiner, economist at DZ Bank.

"In coming months, however, it should get weaker. The strong euro and high raw materials prices indicate that companies will hold back with creating new jobs. The improvement in the labour market will slow down."

Other economies in the 15-nation euro bloc are also under pressure.

Figures from France's statistics office showed French consumer confidence was at its lowest in two decades as higher food and fuel bills made people reluctant to spend.