Germany's unemployment rate rose in May for the first time since 2013 and the jobless figure climbed sharply for the first time nearly two years, defying expectations for further decline, and signaling that the labor market has started to mirror the slowdown in the economy.

The number of unemployed rose by 60,000 month-on-month, figures from the Federal Employment Agency showed on Wednesday, while economists had expected a decline of 7,000. In April, there was a fall of 12,000. The seasonally adjusted jobless rate climbed to 5 percent in May, equaling the rate last seen in February. Economists had expected the rate to remain unchanged at the re-unification low of 4.9 percent logged in each of the previous two months. The latest increase was the first since November 2013, when the unemployment rate climbed to 6.9 percent, historical data from Bundesbank showed. The non-seasonally adjusted unemployment rose by 7,000 persons to 2.236 million from 2.228 million in April. The first effects of the recent weak economic situation are becoming evident in the labor market, especially in jobless claims, the Federal Employment Agency chief Detlef Scheele said in Nuremberg. The greater part of the latest unemployment increase is attributable to a one-off effect from audit activities on the employment status of those receiving jobless benefit, Scheele added. Demand of companies for new employees is noticeably weakening, but remains high, the official said. The German economy, the biggest in the euro area, did manage to avoid a technical recession by stagnating in the final three months of 2018. Following that, the economy grew 0.4 percent in the first three months of the year. However, the near term outlook is bleak for the German economy, which is manufacturing- and export-oriented, as the global economy is slowing amid the escalating trade tensions. On Tuesday, the industrial lobby DIHK cut the growth forecast for this year to 0.6 percent from 0.9 percent predicted in February.

An alarming detail from the DIHK survey of some 25,000 companies survey was export expectations, which were the weakest in a decade. The group predicted further deterioration in the investment and employment plans in the industrial sector. Last week, a survey by the ifo Institute showed that German exporters' confidence eroded sharply in May and morale was particularly weak in the mechanical engineering sector, where firms expect a fall in export orders for the first time in over six years.

The latest Purchasing Managers' survey also revealed that employment growth in the private sector eased to its lowest in just over three years in April.

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