Fears of the German labor market being hit by the 0.6-percent GDP contraction in the final quarter of 2012 were largely unfounded, the Nuremberg-based Federal Employment Agency (BA) reported Thursday.

It said that in unadjusted terms there was only a slight monthly rise in the number of unemployed people in the country in February - 18,000 more than in the previous month and totaling 3.156 million.

"The German labor market seems to have been largely unfazed by weak economic development in recent months," BA chief Frank-Jürgen Weise told reporters. "The small rise in unemployment is attributable to purely seasonal factors."

Optimistic outlook

Adjusted for seasonal peculiarities, the number of jobless people even dropped by 3,000 month-on-month, and by 46,000 when compared to levels recorded in February 2012.

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"The domestic labor market hasn't really been hit by the dent in economic growth towards the end of last year," HSBC Trinkaus analyst Rainer Sartoris told Reuters news agency. "And there's increased confidence that business will be picking up again soon, leading to more jobs in the second half of 2013."

Economists said with wage hikes expected in many industries, domestic consumption was bound to become a major pillar of economic upswing this year.

hg/kms (dpa, AFP, Reuters)