German unemployment fell again to 2.73 million – 6.5 percent of the population – in October, the lowest level since unification, according to data published by the Federal Labour Agency in Nuremberg.

But separate, seasonally-adjusted data calculated by the Bundesbank actually showed a slight increase of unemployment, however, claiming a further 10,000 people are claiming dole money.

This took analysts by surprise, since they had been forecasting a further decline, despite unemployment tending to fall at this time of year as a result of seasonal factors.

The proportion of jobless edged up to 7 percent in October from 6.9 percent in September, which is the first increase in unemployment in Germany since June 2009.

“All in all, the latest data show that the positive development on the labour market is continuing,” labour agency chief Frank Weise insisted at a news conference.

But analysts were not so sure. “While the increase is small and comes after a significant decrease in unemployment in September, the positive trend seems to be broken,” said Berenberg Bank senior economist Christian Schulz.

With the economy likely to fall into mild recession in the winter, unemployment may rise further.

At 7 percent, the German unemployment rate was still very low by recent historical standards, Schulz said.

“Rising wages and a reasonably stable labour market should cushion the economic downturn somewhat, as long as the recession remains brief, but this requires that the eurozone debt crisis is brought under control quickly,” the analyst said.

“The figures should be a reminder to the German government that the domestic economy is not insulated from the fall-out of the crisis,” he concluded.

Jennifer McKeown, senior European economist at Capital Economics in London, similarly believed that the rise in seasonally-adjusted unemployment in October “confirms that the eurozone’s largest economy is experiencing an underlying economic downturn.”

Admittedly, unemployment was still considerably lower than other countries in the eurozone, “but the recent fall suggests that October’s deterioration might mark the start of a trend,” she said.

AFP/jcw