Berlin, Aug 1 (IANS): The number of unemployed people in Germany increased significantly in July, rising by 82,000 to over 2.8 million, as the economy contracts, the Federal Employment Agency (BA) reported on Wednesday.

The agency also noted that this figure represents an increase of 192,000 compared to the previous year, bringing the country's unemployment rate to 6 per cent.

The substantial rise in unemployment in Europe's largest economy is attributed not only to the typical seasonal impact of the summer break but also to the country's sluggish economic growth.

"The weak economic development is putting a strain on the labor market," said Daniel Terzenbach, Director of Regions at the BA, Xinhua news agency reported.

Alongside rising unemployment, job vacancies have decreased. In July, the BA recorded 703,000 job openings, 69,000 fewer than the same time last year. The agency's job index, which measures demand for staff, dropped by 2 points to 107, marking a 12-point decline from July of the previous year.

Additionally, the number of people receiving unemployment benefits rose to 903,000 in July, an increase of 105,000 compared to a year earlier.

Germany, last year's worst-performing major economy, continues to face significant challenges as it struggles to recover. The latest data from the Federal Statistical Office, released on Tuesday, reveals that the situation remains bleak. In the second quarter of this year, Germany's gross domestic product (GDP) fell by 0.1 percent.

The employment barometer of the Munich-based ifo Institute for Economic Research fell to 95.4 points in July, down from 95.9 points in June. "Due to the stagnating economic development, the willingness to hire new staff is decreasing," said Klaus Wohlrabe, head of ifo Surveys, on Wednesday. "Where there is a lack of orders, there is no need for additional staff."