The German Federal Labour Office warned today unemployment in Europe's largest economy would overshoot earlier forecasts and pleaded for more state funds as the jobless total resumed its rise in September.
German seasonally adjusted unemployment rose by 20,000 to 3.882 million, or 9.4 per cent of the working population, confirming earlier leaked figures and in line with economists' forecasts, the Federal Labour Office said today.
The numbers, after no change in August, indicated a recovery of the labour market is several months away.
Head of Germany's Labour Office Mr Bernhard Jagoda said the economic slowdown was dragging on the labour market, particularly in western Germany where the seasonally adjusted jobless total rose by 13,000.
"With them [the terror attacks in the United States], the risks to the economy and labour market have grown," Mr Jagoda said.
"We assume that the average number of unemployed in Germany this year will be around 3.85 million," Mr Jagoda said. A month ago, he had said the Labour Office's 3.7 million forecast seemed overly optimistic.
Mr Jagoda said the labour market - and therefore spending on unemployment benefit - had developed worse than expected and so the Labour Office's financial needs had risen beyond those envisaged by the government in October 2000.
"Whereas in the 2001 budget a government subsidy [for the Labour Office] of 1.2 billion marks was foreseen, it seems likely we will need an additional 2.4 billion to 2.7 billion marks," he said.