The unemployment rate rose to 8.2 percent from 8.1 percent in June, with just under 3.5 million people in Europe’s biggest economy out of work, the figures showed.The government said 52,000 more people were out of work than in June and more than a quarter of a million more than at the same time last year.
However, adjusted for seasonal factors, the Federal Labour Office said unemployment rose 30,000 to leave seasonally-adjusted rate steady at 8.3 percent.
”The recession in the German economy left its traces on the labour market in July,” labour market chief Frank-Juergen Weise said in a statement. “Up until now, the effects of the downturn have been comparatively moderate, mainly because the use of part-time work has stabilised the labour market.”
A state scheme subsidising firms to cut working hours has thus far prevented a flood of jobless claims but experts have warned that the steady trickle in recent months could soon become a deluge.
Jennifer McKeown from Capital Economics warned that as the jobless lines grow, consumers will become less willing to spend, potentially choking off any upturn in the economy.
“As the labour market downturn continues, income growth will be squeezed later this year, suggesting that German consumers will not pull the economy out of recession,” she said in a research note.
She added that the seasonally-adjusted rise in unemployment was rapid, “suggesting that government incentives for firms to retain workers are losing their effect.”