The number of unemployed in Germany rose for the sixth straight month in April, although by less than expected, as recession prompted firms to slash more and more jobs.

Data released by the Federal Labor Agency showed that the number of unemployed rose a seasonally adjusted 58,000 in April, smaller than an upwardly revised 71,000 increase in March. Meanwhile, economists had forecast an increase of 65,000. The adjusted jobless rate total stood at 3.46 million in April, with the jobless rate increasing to 8.3% from 8.1%.

Given that the German economy is contracting at present, this isn't even really bad news, and a number of leading indicators are suggesting that the nosedive of GDP might be approaching its end. So will we not after all be seeing a surge in unemployment? Commerzbank analyst Eckart Tuchtfeld said.

Tuchtfeld noted that short-time work, which is currently easing the strain on the labor market, will not be sufficient to address the crisis by the end of the year. The Commerzbank forecasts some 4.2 million to become unemployed by the end of the year.

A day earlier, the German government said the number of unemployed is expected to increase to 3.7 million this year and to 4.6 million in 2010. The government forecast the German economy to contract the most since the World War II in 2009 and small growth in 2010.

The International Monetary Fund expects a 5.6% contraction in 2009 and a further 1% decline in 2010 for the largest Eurozone economy. It also expects the jobless rate to rise to 9% this year from 7.3% recorded in 2008. The rate will increase to 10.8% in 2010, the IMF forecasts.

Rising unemployment despite implementing several economic stimulus measures is a threat for Chancellor Angela Merkel's government, when it faces election in September 2009.

A separate report from Germany's Federal Statistical Office showed Thursday that the ILO jobless rate rose to 7.6% in March from 7.4% in February. The number of unemployed totaled 3.28 million persons in March, larger than 3.21 million persons in the previous month.

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