A man passes by a local labor agency in Stralsund, northern Germany, on November 29, 2011.
German unemployment rate has increased for the fifth consecutive month in August as the Europe’s economic powerhouse begins to feel the real sting of the eurozone deteriorating economic crisis.
The total number of jobless people rose by 29,100 in August from July to stand at 2.91 million, the highest level of unemployment in Germany since November 2011, according to the German Federal Labor Agency.
"The German economy did not grow much in the second quarter. The slower growth is making itself felt on the labor market," the labor agency said in a statement.
ING Belgium-based economist Carsten Brzeski said the data were "a clear signal that the best times of the German labor market are over."
"Looking ahead, however, it is doubtful whether private consumption can really take over the baton as main growth driver for the German economy," Brzeski cautioned.
"Today's numbers provide further evidence that the labor market is gradually losing steam and that the positive impact on the economy should peter out towards the end of the year," he added.
It comes as major German companies such as carmaker Opel have announced short-time work schemes to cope with slumping demand.
Europe plunged into financial crisis in early 2008. Insolvency now threatens heavily debt-ridden countries such as Greece, Portugal, Italy, Ireland and Spain.
The worsening debt crisis has forced EU governments to adopt harsh austerity measures and tough economic reforms, which have triggered incidents of social unrest and massive protests in many European countries including Portugal, Spain, Greece and Italy.