Berlin - German unemployment rose for the first time in
nearly three years in December, data released Wednesday showed,
adding to signs of the tough year ahead for the nation as shrinking
global growth hits Europe's biggest economy.
Seasonally adjusted unemployment rose by a more-than-forecast
18,000 last month, the nation's Labour Office said, resulting in the
jobless rate edging up to 7.6 per cent from 7.5 per cent in November.
Analysts had expected the numbers out of work to increase by
10,000 in December.
'The December figures show that the economic crisis has reached
the labour market,' said Labour Office chief Frank-Juergen Weise
releasing the data.
'This has also dampened our optimism for 2009,' he said. The
number of German job vacancies fell from 539,384 in November to
503,128 in December, the Labour Office said.
It was the first rise in German unemployment since February 2006
with a solid economic growth rate and a series of labour market
reforms helping to boost hiring in recent years.
'The positive effect of the economic upswing has come to an end,'
said ING economist Carsten Brzeski.
But he went on to say: 'The German labour market seems to be
better prepared to weather stormy conditions than during earlier
recessions.'
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.
Wednesday's jobless data also helps 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 drop in
industrial production and a 1.6-per-cent contraction in German
factory orders as 2007 came to an end.
Germany slumped into a recession during the third quarter last
year with the Berlin-based German Economic Institute for Economic
Research saying Wednesday it expects the nation's economy to contract
by 1 per cent this year.
Other forecasters, however, have painted even gloomier economic
scenarios for the German economy in 2009 as global economic growth
goes into reverse.
Leading German companies have already announced 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 114,000 in December to a total of 3.102 million,
the labour office said.
This pushed the unadjusted unemployment rate up from 7.1 per cent
in November to 7.4 per cent last month. The jobless rate stood at 8.1
per cent in December 2007.
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.
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