German unemployment fell more than expected in October, official figures showed on Thursday, showing that companies in Europe's largest economy were firmly on a post-pandemic hiring spree despite supply bottlenecks that have hurt manufacturers.

The Labour Office said the number of people out of work fell by 39,000 in seasonally-adjusted terms to 2.466 million. A Reuters poll had forecast a fall of 20,000.

The seasonally-adjusted jobless rate dropped to 5.4%.

"Despite the improvement, the numbers remain significantly lower that before the pandemic and we are facing big challenges," said Federal Labour Agency chief Detlef Scheele.

Germany's unemployment rate stood at 4.9% in March 2019, the month the country imposed its first restrictive measures to contain the coronavirus.

(Reporting by Riham Alkousaa and Joseph Nasr, editing by Emma Thomasson)