Unemployment in Germany unexpectedly rose in October, the first increase since early 2010, data showed on Wednesday, compounding fears about the effects of a slowdown in Europe's biggest economy. The seasonally adjusted figures from the Federal Labour Office showed unemployment rose by 10,000 compared to an expected drop of 10,000. That pushed the unemployment rate up to 7.0 percent from 6.9 percent in September.
Economists said the rise confirmed that Germany, which still has lower unemployment rates than elsewhere in Europe, was facing an underlying downturn and that uncertainty over the eurozone debt crisis was affecting hiring at firms. "(The rise) confirms the eurozone's largest economy is experiencing an underlying economic downturn," said Jennifer McKeown, an economist at Capital Economics, adding the deterioration may mark the start of a trend.
Germany's economy recovered quickly from the financial crisis and has been Europe's main engine of growth. But the pace of expansion is easing due to a global slowdown and uncertainty stemming from the eurozone debt crisis which is hitting investment and exports. The Economy Ministry said last month it expected German unemployment to continue to fall next year, with the jobless rate dropping to 6.7 percent from 7 percent in 2011.