Germany in recession.

Three words to cast gloom over euro zone policy makers and investors - even if technically it hasn't happened yet.

And for now the labour market in Europe's biggest economy is holding up.

Unemployment fell in September by a more-than-expected 10,000 - August's figures are also better than previously reported.

And a jobless rate of five per cent is only fractionally above a record low.

After its contraction in the second quarter, expectations are high Germany will have gone into recession this quarter.

Its export-dependent manufacturing base hit hard by global trade tensions and Brexit uncertainty.

But there was more good news on Monday (September 30): August numbers show retail sales rose half a per cent.

In a sign that - amid strong wage growth - German consumers are happy to spend what they earn.

While data from Brussels showed euro zone unemployment at a decade low of 7.4 per cent in August.

As for Brexit: Britain's economy was confirmed on Monday as shrinking by 0.2 per cent in the second quarter.

A figure that could - amid a slump in business investment - have been worse, the numbers suggest ...

Had it not been for robust household and government spending.