Germany's Jobless Rate Creeps Up In April

(Reuters) - Germany's jobless rate edged higher last month on a seasonally adjusted basis after touching a post-reunification low in March, data showed on Wednesday, reviving concerns about the resilience of the German economy to the euro zone crisis.

Seasonally-adjusted data from the Federal Labour Office showed unemployment rose unexpectedly in April by 19,000 to a total of 2.875 million. The consensus forecast in a Reuters poll of 34 economists was for joblessness to drop by 10,000.

However, seasonally-unadjusted data showed that unemployment fell to 2.963 million in April from 3.0 million in March. As a percentage, unemployment remained unchanged at 6.8 percent last month from an upwardly revised 6.8 percent for March.

This (data) is a negative surprise. Economic weakness seems to be taking a toll after all. That is not unusual, as it usually takes about half a year for it to reach the labour market, said Heinrich Bayer at Postbank.

While the figures do not mark the beginning of a downward trend, the steep falls in unemployment seen this year look unlikely to resume, economists said.

We are in a phase of stagnation... Even when the economy picks up momentum, joblessness should stagnate for the rest of the year, Bayer said.

The labour market is not escaping the weak economic situation we saw over the winter, he said

Germany's export-driven economy bounced back from the 2008/09 financial crisis but shrank by 0.2 percent at the end of last year as the euro zone's debt troubles and a global slowdown choked exports and private consumption.

Many economists expect it stagnated in the first quarter, just avoiding the two quarters of contraction which define a recession.

AUSTERITY

Private consumption, propped up by Germany's solid labour market, has so far shown resilience to the phase of economic weakness at the end of last year.

But there are signs that this pillar of support for the German economy, regarded as a bright spot that can weather any bad news, may be starting to wobble.

Recent worse-than-expected data from the manufacturing Purchasing Managers' Index (PMI), which contracted in the last quarter of 2011, seems to be taking its toll on the labour market.

Manufacturing has been struggling for a long time with a weak order intake. On top of that, austerity measures in the euro zone will clip growth for some time. This will also affect Germany for a while, said Bernd Hartmann at VP Bank.

In April, a PMI sub-index tracking employment in manufacturing contracted for the first time in two years, and the GfK consumer sentiment survey inched down for the second month in a row heading into May.

With high employment, the labour market should remain an important growth driver in the first half of the year. However, the signs of a slowdown are hard to miss, said Carsten Brzeski at ING.

The economic tailwind from the last two years is clearly fading away.