BERLIN - German unemployment rose unexpectedly for the first time in nearly two years in May, data showed on Wednesday, in a sign that a growth slowdown in Europe's largest economy is spilling over into the labour market.
The number of people out of work rose by 60,000 to 2.279 million in seasonally adjusted terms, according to data from the Federal Labour Office. That compared with a Reuters consensus forecast for a fall of 8,000.
Ominously, Germany's solid labour market has been the backbone of a domestically driven upswing in recent years. Several months of rising unemployment could weaken household spending and knock out one of the most important growth drivers.
Though the unexpected rise was mainly due to the effect of an audit of the status of some unemployment benefit recipients, but the slowing economy also played a role, Labour Office head Detlef Scheele said.
"On the labour market, we can see first spill-over effects of the recently somewhat weaker economic development," Scheele said. "The demand of companies for new employees is weakening sharply while remaining on a high level."
The seasonally adjusted jobless rate rose to 5.0%, the data showed. In unadjusted terms, unemployment increased by 7,000 to 2.236 million in May.
Germany's export-reliant industrial sector is already facing headwinds from trade disputes and business uncertainty linked to Britain's chaotic departure from the European Union.