The number of people out of work in May rose by 60,000 to 2.279 million in seasonally adjusted terms, according to the Federal Labour Office. It comes as a Commerzbank survey of 2,000 companies confirmed there was a growing sense of negativity among German exporters over the future of the Europe’s largest economy. Three in five respondents said they are braced for the economy to weaken over the next two years. Two thirds said uncertainty from Brexit and the impact from the US-China trade war was something that is currently concerning them.
Meanwhile, 17 percent said they were positive about US economic policies, which have repercussions for Germany as Washington is the largest export market for Berlin.
Germany has left investors on edge in recent months as its manufacturing sector continues to post weakened results.
Factory activity in Germany has been dented from a slowdown in demand, impacting global car sales, as well as being caught up in the tariff spat between the US and China.
Beijing is the most important trading partner to Berlin outside the European Union, meaning Germany is sensitive to any developments in the nation’s standoff with Washington.
Latest figures from the IHS Markit’s flash Purchasing Managers’ Index show manufacturing fell to 44.3 in May, down from the 44.4 in April.
It marks the fifth monthly reading in a row below the 50 mark that separates growth from contraction.
Labour Office head Detlef Scheele said: “On the labor market, we can see first spill-over effects of the recently somewhat weaker economic development.
“The demand of companies for new employees is weakening sharply while remaining on a high level.”
The Labour Office said the slowing economy did play a role in the unexpected rise in unemployment, though added an audit of the status of some unemployment benefit recipients was also to blame.
The seasonally adjusted jobless rate rose to 5.0 percent, the data showed.
In unadjusted terms, unemployment increased by 7,000 to 2.236 million in May.
Bastian Hepperle from Bankhaus Lampe added: “The fat years are over.
“The labor market seems to have reached its zenith.”
Meanwhile, Germany’s DIHK Chambers of Industry and Commerce this week cut its 2019 growth forecast for the German economy to 0.6 percent from 0.9 percent.
DIHK President Eric Schweitzer said the chambers’ latest business survey among more than 25,000 German companies showed expectations for foreign business hit the lowest level in 10 years.
He said: “That’s an alarm signal.”
DIHK said domestic demand remained resilient, adding that business sentiment in retailing and construction was very good.
Last month, economy minister Peter Altmaier lowered the German growth forecast for 2019 to 0.5 percent.
This is down from an already lowered estimate of 1.0 percent, while initial GDP growth expectations for this year were once as high as 1.8 percent.
However, the German government is insisting momentum is expected to pick up in 2020 where growth of 1.5 percent is expected.