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German Unemployment Rises For Fourth Month As Growth Wobbles

German unemployment 281113

The number of unemployed persons in Germany increased for a fourth consecutive month in November to its highest level in two-and-a-half years, amid faltering economic recovery, the latest figures from the Federal Labor Agency showed Thursday.

The number of unemployed increased by 10,000 persons in November from a month earlier to 2.985 million. This is the highest figure since April 2011. Economists had forecast no change in the figure. In October, the number of unemployed recorded an increase of 3,000.

The adjusted jobless rate remained unchanged at 6.9 percent in November, in line with expectations.

"The Fall revival of the German labour market turned out to be softer than normal," said Carsten Brzeski, an economist at ING Bank NV.

"In fact, the November numbers are the worst November performance of the German labour market since 2004," Brzeski said. The data shows "clear signs of a bottoming out of the labour market."

Data released by the Federal Statistical Office earlier today showed that the adjusted ILO jobless rate held steady at 5.2 percent in October.

The number of unemployed persons fell 0.4 percent on a month-on-month seasonally adjusted basis to 2.22 million, while the number of persons in employment edged up 0.1 percent to 40.59 million, the statistical agency said.

The German economy expanded 0.3 percent quarter-on-quarter in the third quarter after a relatively strong 0.7 percent expansion in the second quarter. The economy stagnated in the first quarter.

Despite the unsteady recovery, sentiment among consumers and businesses remained strong. Survey results from the Munich-based Ifo Institute showed last week that the sentiment among firms rebounded strongly in November to reach its highest level in more than one-and-a-half years.

Results of a survey by the Centre for European Economic Research or ZEW showed that investor confidence has risen to its highest level in four years in November.

Consumer confidence hit a six-year high heading into December as hopes of a faster recovery and the reduction in interest rates boosted household sentiment, survey results from the market research group GfK showed Wednesday.

Chancellor Angela Merkel's Christian Democrats and the center-left Social Democrats (SPD) reached a deal early Wednesday to form a coalition government. The agreement includes a proposal to introduce a minimum wage and improve pension benefits.

The minimum wage could support private consumption, Brzeski said. However, after the introduction of a minimum wage, it will be hard to squeeze additional positive effects out of the labor market, the economist added.

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