Jump in Joblessness

The country's dole queues swelled by a seasonally adjusted 56,000 to 3.267 million this month after the numbers out of work rose by 18,000 in December. Analysts had forecast that an additional 30,000 Germans would be out of work.

In politically more important seasonally unadjusted terms, the number of people out of work surged by 387,000 to 3.489 million, pushing up the unemployment rate to 8.3 percent.

"The demand for labor fell strongly," said German Labor Office chief Frank-Juergen Weise.

Jobless data follows wave of layoffs

German employment hit a record 40.3 million last year to reach the highest level since German unification in 1990 as solid economic growth and labor market reforms helped to boost hiring in recent years.

But as 2008 drew to a close, the global slowdown began to tighten its grip on the German economy with both economists and the country's labor office warning that joblessness in the country will rise in the coming months.

Indeed, the new German jobless data follows a series of announcements by companies about plans for layoffs and production cuts as they face up to what is expected to be the biggest economic downturn since the end of the Second World War.

On Wednesday, Europe's biggest software manufacturer SAP AG added its name to the list of companies cutting jobs when it announced that the global economic downturn had forced the German-based company to slash its workforce by about six percent or 3,000 jobs.

Chancellor Angela Merkel's government this week agreed to a second economic stimulus package worth 50 billion euros ($66.5 billion) over the next two years and which is partly aimed at kick-starting economic growth through a batch of infrastructure projects and tax cuts.