Live updates: Hopes grow for Ukrainian grain shipments as Russia withdraws from Snake Island

German unemployment rose unexpectedly for the first time in 15 months as Ukrainians fleeing war were added to the social security figures for the first time.

Bundesbank statistics released on Thursday showed seasonally adjusted unemployment soared to 5.3% this month, from 5% in May. Economists polled by Reuters expected no change. A year ago, the rate was 5.8%. It was the first monthly increase since February last year, when the rate was 6%.

The inclusion of Ukrainian refugees in labor market figures has resulted in “one-off distortion”, said Melanie Debono, senior Europe economist at Pantheon Macroeconomics, which forecasts a recession in Germany in the second half of the year.

“The decline in unemployment has slowed down in Germany in recent months,” she added. “We suspect that hiring turnover will slow further as the economic downturn begins.”

The number of registered unemployed increased by more than 100,000 in June, according to the Federal Employment Agency. Analysts had expected a drop of 6,000.

“The labor market as a whole remains stable,” Detlef Scheele, director general of the Federal Employment Agency, told a monthly press briefing in Hamburg on Thursday.

“The June surge in claims is unlikely to be repeated, but we must assume that the labor force will now be larger by the end of the year,” Debono said in a note.

Around 700,000 refugees have moved to Germany from Ukraine since Russia invaded the country in February.

Unemployment in the eurozone fell to 6.6% last month, from a downwardly revised 6.7% in April according to Eurostat figures. Economists expected it to be unchanged at 6.8%.

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