German Unemployment Rises More Than Expected

(RTTNews) - Joblessness in Germany increased more than expected in February as the weaker economic activity started to hurt the labor market.

The unemployment rate remained unchanged at 5.9 percent in February, data from the Federal Labor Agency showed Thursday. The rate was seen at 5.8 percent.

The number of people out of work increased by 11,000 in February after rising 1,000 in January. Unemployment was forecast to rise by 6,000.

Federal Employment Agency Chief Andrea Nahles said employment and the demand for labor are showing a steady trend, with the labor market proving to be stable at the beginning of the year despite the continuing weakness in the economy.

A survey by the ifo Institute showed this week that hiring intentions among companies in Germany weakened further in February and even layoffs are possible in the months ahead.

Signs continue to point to job cuts in manufacturing and also to trade, the think tank said.

The labor force survey data from Destatis today showed that the number of unemployed remained unchanged at 1.38 million in January. Unemployment increased by 31,000 or 2.3 percent.

The jobless rate came in at adjusted 3.1 percent, unchanged from December.

Elsewhere, separate data showed that consumer spending remained weak at the start of the year.

Retail sales decreased 0.4 percent in January, confounding expectations for an increase of 0.5 percent.

Food retail sales gained 1.1 percent on month, while non-food retail stagnated in January.

Earlier this month, the government cut its growth projection for this year to just 0.2 percent from 1.3 percent. The Bundesbank said in its monthly report that the German economy likely entered a recession in the first quarter but the trend will not be long-lasting.