German unemployment rose for a fourth month in November, signaling an uneven recovery in Europe’s largest economy.

The number of people out of work climbed a seasonally- adjusted 10,000 to 2.985 million, after gaining by a revised 3,000 in October, the Nuremberg-based Federal Labour Agency said today.

The adjusted jobless rate was unchanged at 6.9 per cent. Germany is relying more on its home economy as the euro area, its biggest export destination, struggles to sustain a nascent recovery.

The country’s third-quarter growth of 0.3 percent was entirely driven by domestic demand, led by capital investment and construction. Consumer confidence will rise next month to the highest level in more than six years, a survey by GfK SE showed yesterday.

"Germany's economy is growing at a moderate pace in the fourth quarter and this is reflected in the number of unemployed," said Andreas Moeller, analyst at WGZ Bank in Dusseldorf. "Low demand in other euro-zone economies is affecting exports in a moderate way, while income and investment are growing stronger."

Economists forecast that German gross domestic product will expand 0.4 per cent in the final three months of this year, twice as much as their prediction for the euro area.

Chancellor Angela Merkel's Christian Democratic bloc yesterday struck a deal with the Social Democrats to form a coalition government, more than two months after she won national elections.

The agreement, which must be approved by the SPD’s membership, includes a national minimum wage and spending on pensions and infrastructure, while Dr Merkel held firm on her refusal to raise taxes.