A seasonal rise in employment takes place every September

The number of workers without jobs, adjusted for seasonal factors, rose by 27,000 on the month to 4.4 million, the Federal Labour Office said.

The increase was double that expected by economists, and marked the eight consecutive monthly rise in the adjusted jobless total.

However, the unadjusted figure fell by 90,000 to 4.2 million.

Employers cautious

The unadjusted figure does not smooth out the impact of a seasonal pick-up in recruitment in September as factories and businesses get back to work after the summer holidays.

The rise in the adjusted figures, seen by economists as a more reliable guide to the state of the labour market, suggests that companies remain reluctant to hire despite signs that the German economy is improving.

"The economic development in Germany is still positive, but the labour market is showing no sign of improvement," said Labour Office chief Frank Weise.

"The economic recovery is not strong enough and confidence not yet firm enough to lead to a net reduction in unemployment."

German unemployment is running at 10.7%, according to the latest figures, up from 10.6% the previous month.

That is above the average for the 25-nation European Union (EU), where unemployment stood at 9% in August, unchanged from July, according the EU's statistics agency Eurostat.

The German economy, best by sluggish growth for the past three years, expanded by a better-than-expected 0.5% in the second quarter of 2004, the most recent period for which figures are available.

However, analysts said strong export sales accounted for the bulk of the growth, with domestic demand remaining weak.