8 June 2004, 11:14  German unemployment rises for fourth month

German unemployment rose for a fourth straight month in May but by less than economists expected, data due to be released on Tuesday will show. A source with knowledge of the data due to be released by the Federal Labour Office around 0755 GMT said unemployment adjusted for seasonal factors rose 9,000 to 4.374 million, the slowest monthly increase this year, leaving the adjusted jobless rate unchanged at 10.5 percent. Economists polled by were forecasting unemployment would rise by 15,000 from April . The 27 predictions ranged from unchanged to a rise of 38,000. Unemployment in west Germany adjusted for seasonal factors rose 9,000, while the jobless total in east Germany was unchanged, the source said.
The source said the Office would report unemployment on an unadjusted basis fell 150,200 month on month to 4.293 million, reducing the unadjusted jobless rate to 10.3 percent from 10.7 percent. Germany's unemployment rate harmonised to compare with that of other European Union countries was unchanged at 9.8 percent, the source added. The data will be bad news for Chancellor Gerhard Schroeder whose embattled Social Democrats have sought to shift attention to foreign policy from domestic woes ahead of Sunday's European and regional elections. The Labour Office will say economic growth is still too weak to create jobs, the source said. Employment data for March, the last month for which figures are available, show payrolls shrank an adjusted 33,000 that month, the source said. However, on a positive note, seasonally adjusted vacancies in May rose for the first time in 10 months. Germany's economy grew by 0.4 percent in the first quarter of 2004, its strongest quarter-on-quarter growth in three years, but growth was almost entirely due to exports. Private consumption and the domestic economy, on which most jobs are dependent, remain weak. Promising data released last week showed industrial orders increased by their highest rate in more than a year in April, but economists say the high price of oil and persistent weak consumer demand still pose a serious threat to the recovery. Industrial output data, to be released at 1000 GMT on Tuesday, may also provide positive signs. Economists forecast production will have risen 1.0 percent in April, albeit after a 1.1 percent fall in March.///

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