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German Unemployment Increases More Than Forecast


German unemployment increased far more-than-expected in December as trade disputes weighed heavily on the manufacturing sector, in turn hurting hiring and the labor market.

Data from the Federal Employment Agency showed on Friday that the number of people out of work rose by a seasonally adjusted 8,000 persons. This was double the increase of 4,000 persons that economists had predicted.

The agency attributed the latest increase in unemployment mainly to the development in the unemployment insurance sector due to the economic downturn.

The decline in November was revised to 14,000 from 16,000 reported initially. In October, the joblessness grew by 7,000 persons.

The seasonally adjusted jobless rate was unchanged at a near-record low of 5 percent in December, in line with expectations.

Underemployment rose by 6,000 persons from the previous month, after a decline of 5,000 in November.

"The labor market was largely stable at the end of the year," the Federal Employment Agency CEO Detlef Scheele said in a press conference in Nuremberg. "However, traces of the economic downturn are evident."

On a non-adjusted basis, the number of unemployed rose by 47,000 persons monthly to 2.227 million and the jobless rate climbed to 4.9 percent from 4.8 percent in the previous month.

Data released by Destatis, earlier in the day, showed that the ILO jobless rate held steady at a seasonally adjusted 3.1 percent in November.

On an unadjusted basis, the unemployment rate rose marginally to 3.1 percent from 3 percent a month ago. Results of the labor force survey showed that 1.36 million people were unemployed in November, down 43,000 from the same month a year earlier.

According to the latest Purchasing Managers' survey, manufacturers reported marked decreases in output and employment in December. They cut jobs at one of the fastest pace over the last decade.

Nonetheless, official data released on Thursday showed that employment hit a record in the whole year of 2019 driven by higher labor force participation and the immigration of foreign workers. Employment totaled 45.25 million in 2019, the highest since the German reunification in 1991.

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