By Maria Martinez
BERLIN (Reuters) -German unemployment rose more than expected in October, Labour Office figures showed on Thursday, showing some cracks in what has been a very resilient labour market.
The Federal Labour Office said the number of people out of work increased by 30,000 in seasonally adjusted terms to 2.678 million. Analysts polled by Reuters had expected the total to rise by 15,000.
"For a good year now, the German economy has more or less been treading water," said Andrea Nahles, chairwoman of the Federal Employment Agency, noting that this was taking its toll on the labour market.
The seasonally adjusted jobless rate grew to 5.8% from 5.7% in September.
In October, there were 749,000 job openings, 98,000 fewer than a year ago, the Federal Labour Office said.
Germany's manufacturing Purchasing Managers Index (PMI) on Thursday showed a solid and accelerated reduction in factory workforce numbers in October.
"Yet, when comparing to previous recessions, the current job scenario seems relatively favourable given the overall situation in the manufacturing sector," said Cyrus de la Rubia, Hamburg Commercial Bank (HCOB) chief economist.
He said this was the result of the structural labour shortage affecting the German economy, meaning that most companies are holding onto the people they have.
"Labour hoarding was the main reason why employment was so resilient even when the economy was struggling," Tomas Dvorak, senior economist at Oxford Economics, told Reuters.
But he added that labour hoarding only works in a setting where the economic downturn is short-lived, and now that firms are realising the economic slowdown will last, they will have to lay workers off.
"It might not be a severe slowdown, but it's going to be a slow burner," Dvorak said.
(Reporting by Maria Martinez, Holger Hansen and Miranda Murray; Editing by Rachel More and Christina Fincher)
