'Job miracle' stalls as unemployment rises in Germany

Germany's unemployment rate rose slightly in July, official figures showed Thursday, a blip in what has become known as a "jobs miracle" as Europe's top economy powers its way out of recession.

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The federal labour office said that 7.6 percent of the workforce was unemployed in July, up from 7.5 in June, while the total number of people out of work rose 39,000 to 3.19 million.

Stripped of seasonal effects skewing the figures, however, the adjusted number of jobless fell 20,000 from June, the labour office said, compared with a projected drop of 19,000 according to analysts polled by Dow Jones Newswires.

The head of the labour agency, Frank-Jürgen Weise, said: "The German economy is still on an upward trend, the situation on the labour market has improved further."

Germany is leaving behind its worst recession in more than six decades last year when output slumped by nearly five percent.

However, due partly to state-sponsored shortened working hours, the feared spike in unemployment did not take place, with the rate going up to 8.2 percent. Some had predicted that the 10 percent mark would be breached.