German unemployment rises significantly less than expected in July

BERLIN, July 31 (Reuters) - The number of people out of work in Germany rose significantly less than expected in July, labour office figures showed on Thursday, even as the job market remains firmly in the grasp of a weak economy.

The office said the number of unemployed increased by 2,000 in seasonally adjusted terms to 2.97 million.

Analysts polled by Reuters had expected a rise of 15,000.

Germany's job market has been squeezed by two years of economic contraction, even against a backdrop of long-term labour shortages, with the number of unemployed people approaching the 3 million mark for the first time in a decade.

"Unemployment has risen due to the beginning of the summer break," said labour office head Andrea Nahles.

The seasonally adjusted employment rate remained unchanged at 6.3%.

Nahles said earlier this month that improvement is not expected before next summer as the German government's massive spending surge will have a delayed impact on the job market.

There were 628,000 job openings in July, 75,000 fewer than a year ago, in another sign of a slowdown in demand, the labour office said.