German unemployment edges up as economy slows | Business| Economy and finance news from a German perspective | DW | 30.08.2012
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German unemployment edges up as economy slows

Slowing global economic activity and the debt crisis in Europe hit the German labor market in August as unemployment rose for the fifth month in a row. Key job indicators show no signs of improvement.

The number of jobless Germans rose to 2.9 million in August - 29,000 more than in the previous month, the German Labor Agency said Thursday.

Although the jobless rate remained unchanged at 6.8 percent, the figure was the highest since April this year.

In adjusted figures, accounting for seasonal factors such as the summer holidays and graduates seeking jobs, German unemployment rose by 9,000.

This number was higher than expected by economists, who predicted the number of jobless Germans to come in at 8,000, in a poll carried out by Reuters news agency earlier this month.

"Key labor market indicators are deteriorating, reflecting a slowdown in the German economy," Labor Agency chief Frank-Jürgen Weise told a news conference in Nuremberg.

German Gross Domestic Product (GDP) slowed to 0.3 percent in the second quarter of 2012, as businesses cut back on investments.

In addition, industrial orders were shrinking in August, while business and investor confidence dropped for the fourth consecutive month.

Many economists predict German GDP to fall further in the third quarter of this year, which would drive Europe's largest economy closer to the brink of a technical recession - defined as two quarters of economic contraction.

However, Frank-Jürgen Weise noted that employment numbers reached a historic high in July, as 41.68 million Germans out of a population of about 82 million were working - 469,000 more than in the same month in 2011.

uhe/hc (dpa, Reuters)