Germany's unemployment increased at a faster-than-expected pace in April as the extreme cold weather kept employees out of work for an unusually long period, raising concerns that the reduced economic activity could weigh on recovery prospects.
The number of unemployed persons increased by 4,000 month-on-month to around 2.94 million in April, after rising by around 12,000 in March, the Federal Labor Agency said Tuesday. The number of jobless was forecast to increase by 2,000.
The seasonally adjusted unemployment rate, meanwhile, remained unchanged at 6.9 percent for the seventh successive month in in April, which was close to the re-unification low of 6.8 percent. It was in line with economists' expectations.
Earlier in the day, the Federal Statistical Office said that in the month of March, Germany's unemployment rate stayed steady at 5.4 percent on an adjusted basis, while the unadjusted jobless rate slipped to 5.6 percent from 6 percent in February.
The number of unemployed fell 6.7 percent month-on-month to 2.37 million in March. Employment, meanwhile, rose 0.4 percent to 39.99 million.
While upgrading its outlook for the German economy, the Economy Ministry last week said the labor market would gain further momentum this year and employment would increase.
In a clear sign of deterioration of the purchasing power of German households, retail sales decreased by 0.3 percent in March, marking the second consecutive contraction, though at a slower rate than February's 0.6 percent.
On a positive note, data from a survey by research group GfK today showed that consumer confidence in Europe's largest economy is set to improve further in May, contrary to expectations that sentiment will remain unchanged. Retail sales decreased at a slower pace in March, data from Destatis showed.
Last week, the Economy Ministry forecast that the German economy would expand 0.5 percent in the whole of 2013, faster than the previous forecast of 0.4 percent. Next year, the GDP is seen rising strongly by 1.6 percent.
Earlier, a report from the Bundesbank said that the German economy is poised to pick up in the second quarter. Although the industrial sector probably did not provide any impetus for growth in the first three months of 2013, the services sector should have expanded again.
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