Economic Skies Darkening for Germany

Unemployment jump in July shows 'signs of the first effects of deteriorating economic conditions' in the eurozone's strongest economy.

Unemployment in Germany rose in July as the eurozone debt crisis increasingly casts a pall over Europe's biggest economy, official data showed on Tuesday.

Headline unemployment rose sharply, with the total number of people out of work up by 66,800 in July from June to stand at 2.88 million, according to the Federal Labor Agency, responsible for compiling the monthly data.

The headline jobless rate, which measures the proportion of people registered as unemployed against the working population as a whole, rose to 6.8% in July from 6.6% in June.

Unemployment tends to rise in the summer as school-leavers sign on the dole and companies close for the holidays but even adjusted for such seasonal factors, unemployment is on the rise in Germany, according to data published separately by the German central bank or Bundesbank.

The seasonally adjusted jobless total rose by 7,000 to 2.89 million in July. It was the fourth consecutive monthly increase and brought the total to its highest level since December 2011.

The adjusted jobless rate was unchanged at 6.8%, the Bundesbank calculated.

Labour agency chief Frank-Juergen Weise, presenting the monthly jobless at a regular news conference in Nuremberg, said the rise in unemployment in July was "primarily due to seasonal factors."

Nevertheless, "the risks for the German economy are on the increase," he cautioned.

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