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German jobless up as war hurts
BERLIN, Germany (CNN) -- German unemployment rose to a five-year high in March as the country continued to struggle out of a recession and war in Iraq added to uncertainty. The number of people out of work in March on a seasonally adjusted basis rose 52,000 to 4.41 million, the Federal Labor Office said on Thursday. Analysts polled by Reuters had forecast adjusted unemployment rising 40,200. Labour Office chief Florian Gerster warned the job market was unlikely to improve until next year. "In view of the stagnating economy and the Iraq war, no real upturn in the labour market can be expected before 2004,'' Gerster told a news conference. German Chancellor Gerhard Schroeder in a speech to parliament said the war in Iraq was hurting the global economy. "We are already seeing today how the uncertainties from the war are dampening, if not destroying, economic expectations everywhere,'' Schroeder said. The rise was seen as "bad news" by Manuela Preuschl, an economist at Deutsche Bank, who told Reuters: "The development in the last two months was worse than expected. We had thought that the worst was over after the strong rise in January. "Companies obviously have no hope for an economic improvement. On the contrary, there is obviously the expectation of a further economic weakening." The data could further dent consumer confidence and spending. That could make it more difficult for the government to hit its lowered growth target and might push the economy into its second recession in two years. Earlier this year, the government cut its growth target to 1 percent for 2003 from 1.5 percent. The economy grew 0.2 percent last year -- its slowest in nine years. Business and consumer confidence has been undermined in recent months, various surveys have shown, and many companies are cutting jobs or folding. Commerzbank, Germany's second-largest bank, said this week it would cut 3,100 jobs as it struggled with loan defaulters. The unadjusted jobless total fell 98,300 to 4.608 million, the Office said, while the unadjusted jobless rate eased to 11.1 percent in March from 11.3 percent in February.
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