The number of people out of work in Germany rose by 114,000 in December to 3.1 million as the fallout from the economic downturn begins to be felt in the labour market, data from the Federal Labour Agency showed.
"2008 was the best year for the jobs market. Nevertheless, the December data show that the economic crisis has reached the jobs market," the head of the Labour Agency, Frank Weise, said in a statement.
"As a result, our optimism for 2009 has also been dampened," Weise added.
December's unemployment rate rose by 0.3 points to 7.4 percent.
Even adjusted for seasonal fluctuations, unemployment in Europe's biggest
economy rose by 18,000 from the level in November - the first such increase
since February 2006.
Following a surprisingly resilient performance in recent months, the positive trend in the German jobs market has now turned, the Labour Agency said.
Alexander Koch, an economist at Unicredit, said December's data marked a "turning point" for Germany's labour market and predicted more people would lose their jobs as the economy spirals deeper into recession.
"The trend reversal cannot be halted and the negative dynamic on the labour market should pick up considerable momentum in the further course of this year," Koch said.
Germany is already in recession and is forecast to suffer its worst slump in the post-war period in 2009. In a bid to stave off the worst effects of the downturn, Chancellor Angela Merkel's coalition is due later this month to launch a second stimulus package worth some €50 billion ($70 billion).
In mid-December, Weise told the magazine Focus that German unemployment could soar to 3.6 million within six months.
"By the second half of next year, it is possible, on the basis of current data, that the number out of work will reach 3.6 million," he told the magazine.