Page last updated at 12:12 GMT, Wednesday, 7 January 2009

Germany sees higher jobless total

German car production line
Germany's economy has been hit by slowing demand for its goods

Germany saw its unemployment levels rise for the first time in nearly three years in December, according to government figures.

Unemployment rose by 18,000 for the month, higher than the 10,000 that had been expected by analysts, putting the jobless rate at 7.6%.

The rise comes as slowing foreign demand for its goods hits the economy.

Germany, Europe's largest economy, fell into recession in the second half of 2008, federal statistics showed.

"The era of falling unemployment rates is now over for what will likely be quite some time," said Glen Marci of DZ Bank.

It is the first increase in joblessness since February 2006, though that increase was caused by a change in the way that benefits were awarded. Before that, unemployment had last risen in March 2005.

In a move to tackle the slowdown, the government has pledged 31bn euros (28.2bn) to stimulate the economy. It is also looking at developing a second package.

"How steep the rise in unemployment will be hinges largely on what the government agrees to do in its second stimulus package," said Joerg Lueschow, an economist at WestLB.

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