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German unemployment rose more than expected in May, according to the latest figures by the federal employment agency. The increase in joblessness was blamed on bad weather and a high number of public holidays in the month.
The number of unemployed people rose a seasonally adjusted 21,000 to 2.96 million in May from April, the fourth straight monthly gain. Analysts surveyed by Bloomberg had expected unemployment to rise by 5,000.
Despite the increase in people out of work, the adjusted unemployment rate remained flat at 6.9%. Frank-Juergen Weise from the federal agency said the German job market was “fundamentally sound and is developing solidly in a difficult economic environment.”
Carsten Brzeski, senior economist at ING Groep NV in Brussels, warned of a weaker job market. “This is a clear warning that the debt crisis is finally taking its toll on the German labour market,” he said.
But he added that weak data “can also be explained by the relatively high number of public holidays in May and the still cold weather. Therefore, it is far too premature to start singing Swan Songs on the labour market.”
Companies in Germany are generally showing greater degrees of caution as demand for labour continued to decline in May. Demand for staff was down, following months of decline although the staffing, healthcare and metal/ electrical industries still posted an increase in hiring activity.