Shoppers were reluctant to hit the shops during July's heat wave

The number of people out of work rose by 5,000 on a seasonally-adjusted basis in August.

In another development, retail sales fell 1.5% in July, a far sharper drop than the 0.4% forecast by experts, following a 1.1% increase in June.

Analysts said the record heatwave and the end of the World Cup football tournament had affected sales.

"We had expected a decline, but not of this magnitude," said Alexander Koch, economist at HVB.

"In the recent month, we saw a decline for two reasons: the positive effects of the World Cup were no longer there and we had the hottest month of July on record.

"When it's 30 degrees outside, people would rather go to the swimming pool than to the shops."

Overall, he said, putting the figures for June and July together left a 0.7% rise from April and May - a "modest upwards trend".

Rosy outlook

Looking ahead, most analysts expect July's figures to be revised upwards, and for consumption to return to growth in coming months.

Despite the rise in unemployment, the jobless rate remained steady at 10.6% and forecasts predict more companies will soon be taking on workers after the summer break.

"The revival of the domestic market is having a positive effect on the labour market," said Peter Meister of BHF Bank. "The positive trend in the labour market will continue."

Germany's economy appears to have turned a corner, with recent figures showing it grew at 0.9% between April and June this year - its best quarterly growth since 2001.