Berlin - German unemployment rose in December, analysts
predict data to be released Wednesday will show, adding to signs of
the tough year facing Europe's biggest economy.
The country's dole queues swelled by a seasonally adjusted 10,000
last month, analysts forecast, as a result cancelling out the fall in
the numbers out of work in November. The unemployment rate, however,
is expected to have remained at 7.5 per cent in December.
'At the moment the labour market is stagnating before the lay offs
begin in January,' said DZ-Bank economist Philipp Jaeger.
Wednesday's jobless data to be released by the Nuremberg-based
Labour Office will also help to set the stage for the publication
later this week of another bleak round of German economic data.
This includes figures recording another drop in the nation's key
exports in November on the back of a shrinking global economy and the
recent rise in the euro.
At the same time, data is expected to show a 2-per-cent slump in
industrial production and a 1.6-per-cent contraction in German
factory orders as 2007 came to an end.
Combined with a sharp fall in inflation, the grim economic news
emerging from Germany is also likely to add to the pressure on the
European Central Bank to press on with its rate-cutting cycle this
year.
German employment hit a record 40.3 million last year to reach the
highest level since German unification in 1990 as solid economic
growth and labour market reforms helped to boost hiring in recent
years.
But a drop in German unemployment in December will also bring to
an end a string of monthly falls in the numbers out of work in the
nation with both economists and the country's labour office warning
that joblessness in the country will rise in the coming months.
Indeed, the new German jobless data follows a series of
announcements by companies about plans for layoffs and cutting
production as they face up to what could be the biggest economic
downturn since the end of the Second World War.
In the politically important seasonally unadjusted terms, German
unemployment rose by between 70,000 and 110,000 in December to a
total of between 3.06 million and 3.1 million, analysts expect
Wednesday's data to show.
Chancellor Angela Merkel's ruling coalition are hoping to formally
sign off next week on a second economic stimulus package worth to 50
billion euros (68.2 billion dollars) over the next two years and
which is partly aimed at underpinning economic growth through a batch
of infrastructure projects.
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