(Bloomberg) -- German unemployment increased as Europe’s largest economy braces for a recession driven by surging energy costs.

Joblessness rose by 17,000 in November, more than economists had estimated, data Wednesday showed. That pushed the unemployment rate up to 5.6% from 5.5%.

“Overall, the labor market is stable,” Daniel Terzenbach, who’s in charge of regions at the Federal Labor Agency, said in a statement. “Seasonally adjusted unemployment and underemployment have risen once more and short-time work is increasing again, but employment is growing significantly.”

Germany’s labor market has remained resilient despite the war in Ukraine and the fastest inflation in decades. A rising number of companies are even short on staff and unions have been able to secure stronger wage deals. 

Surveys of purchasing managers this month showed employment increasing even as data pointed to shrinking economic activity. A rise in joblessness in recent months was caused in large part by the inclusion of Ukrainian refugees in the statistics. 

The German economy is being hit harder than most in the euro area by the halt in Russian natural gas shipments. With commodity costs surging and weighing on demand, it’s widely expected to fall into recession before rebounding in the spring.

--With assistance from Kristian Siedenburg and Harumi Ichikura.

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