BERLIN (AP) — Unemployment in Germany, Europe's biggest economy, rose in July as a typical seasonal increase was reinforced by a gradual slowing in the labor market, official data showed Tuesday.
The unadjusted jobless rate climbed to 6.8 percent from 6.6 percent in June, the Federal Labor Agency said. The number of people registered as unemployed was up 67,000 compared with the previous month at 2.876 million, though it was 63,000 lower than in July last year.
Labor agency chief Frank-Juergen Weise blamed the increase largely on seasonal factors — unemployment typically climbs during the summer break as school-leavers register jobless and temporary contracts expire — but said there are also "indications of a weaker development" on the so-far impressively buoyant labor market. That echoed comments he made when unemployment dropped modestly in June.
In seasonally adjusted terms, the unemployment rate stood at 6.8 percent for the eighth straight month in July though the number of people without work increased by 7,000 — the fourth consecutive month of small increases.
German unemployment remains low, in sharp contrast with rates of more than 20 percent in Spain and Greece. The country has enjoyed two years of strong economic growth — fueling a healthy job market and meaning that many workers have enjoyed solid pay increases this year.
However, with concern mounting about Spain's financial troubles and new questions over debt-laden Greece's future in the eurozone, worries are growing that demand for German goods will be hit by declining economies across Europe and that Germany will have to inject more money into the 17-nation eurozone to keep it afloat.
ING economist Carsten Brzeski said it was a "warning signal" that the unadjusted jobless figure increased by the largest amount for July since 2004.
"All in all, the German labour market is clearly losing momentum," he said. "Given the high level of employment, there is no need to panic. However, indications are increasing that light-hearted times are coming to an end."
Data released Tuesday by the Federal Statistical Office showed retail sales in Germany slipping by 0.1 in June compared with the previous month, a third consecutive small decline.