* German jobless up by 9,000 in September, in line with
* Remains close to post-reunification low, still outperforms
* Suggests domestic economy won't compensate for weaker
* Jobless could become problem for Merkel ahead of elections
(Adds details, background, quotes)
By Sarah Marsh
BERLIN, Sept 27 German unemployment rose for a
sixth month running in September, suggesting domestic demand
might not be able to compensate for weakening exports amid the
euro zone crisis and power growth in the bloc's number one
Joblessness remains near to its lowest level since German
reunification more than two decades ago, and the unemployment
rate held steady at 6.8 percent, contrasting starkly with the
sickly labour market in many peers, including France and Spain.
But it rose by 9,000 in September, as the global slowdown
and the euro zone's three-year-old crisis weigh on exports and
prompt companies to hold back on investment, and economists said
they saw it rising more in the months ahead.
Higher jobless figures could become a headache for German
Chancellor Angela Merkel, who faces an election next year, and
may reduce the willingness of average Germans to continue to
bail out southern euro partners like Greece.
"The labour market is, slowly but surely, losing steam and
all forward-looking indicators also don't bode well," said ING
economist Carsten Brzeski.
"It is doubtful whether private consumption can really take
over the baton as main growth driver for the German economy."
German business sentiment dropped for a fifth straight month
in September, raising fears of recession, data showed on Monday.
The economy remained resilient throughout much of the
crisis, recovering swiftly from the 2008/09 financial crisis,
although growth slowed in the second quarter of this year to 0.3
percent from 0.5 percent in the first.
The strength of Germany's labour market, a product of
structural reforms undertaken in the mid-2000s and years of wage
restraint, has been fundamental in fuelling domestic demand. It
has prompted many to herald the "German job miracle".
The contrast with other European countries is stark. In
Spain, youth unemployment stands at around 50 percent, while
data on Wednesday showed the number of unemployed in the euro
zone's second largest economy of France topped the 3 million
mark in August for the first time in 13 years.
The French industry ministry said earlier this week that
France should copy Germany's labour model to help its struggling
companies regain a competitive edge.
Many experts hoped this robust German labour market would
continue to fuel private consumption and thus drive economic
growth at home, and in the struggling euro zone via imports.
But signs of weakness are increasing. Big German firms like
Metro, the world's No.4 retailer, Lufthansa
and Deutsche Bank are slashing thousands of jobs.
Others like Opel, the German unit of U.S. automaker General
Motors, and steelmaker ThyssenKrupp, are
returning to "Kurzarbeit", a government-subsidised short-time
work scheme that was used widely by German industry during the
global financial crisis.
"The debt crisis is taking its toll," said Andreas Scheuerle
at Dekabank. "Companies are holding back on investing."
Thursday's Labour Office data showed the number of people
out of a job rose to 2.911 million in September from 2.902
million in August, its highest level since October last year.
"The development is of course still very, very moderate,"
said Peter Meister at BHF Bank. "In the next couple of months
seasonally adjusted unemployment will rise somewhat more
strongly than has been the case until now."
(Additional reporting by Michelle Martin; Edited by Madeline