RTTNews - The number of unemployed in Germany rose for the eighth straight month in June, but the rate of increase was less than expected.

Data released by the Federal Labor Agency showed that the number of people out of work rose a seasonally adjusted 31,000 to 3.5 million. Economists had forecast an increase of 45,000. The adjusted jobless rate inched up to 8.3% in June from 8.2% in May.

At the same time, the labor agency revised May's increase to 7,000 from the initial estimate of 1,000.

In May, the labor office made some changes in the method of calculating unemployment figures. The new rule instructs the labor agency to exclude people attending training in a company as unemployed. Without this change, the number would have risen 50,000 in June, the agency said.

Commerzbank analyst Eckart Tuchtfeld said, The outlook shows just how much the picture has already darkened, and there is much to suggest it will get even gloomier.

German unemployment was on the rise since November 2008 and in March 2009, it grew the most, by 67,000. The government expects the number of unemployed to increase to 3.7 million this year and to 4.6 million in 2010.

To an extent, short-term work is helping the country to address the situation. But, most economists expect a sudden sharp rise in joblessness once firms pull out of this programme.

Commerzbank analyst said many companies will have to cut more jobs from the autumn. We expect unemployment to reach roughly 4 million by the end of the year, which would be some 800,000 more than at the end of 2008, Tuchtfeld said.

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