Berlin  - German unemployment edged up again in March, data to be released Tuesday is forecast to show, amid signs that the sharp downturn in Europe's biggest economy is beginning to bite.

Analysts expect the German Labour Office to say that seasonally adjusted unemployment, which reflects overall trends in the job market, have risen by 53,000 this month.

This is forecast to push the seasonally adjusted unemployment rate up to 8.1 per cent in March from 7.9 per cent in February.

However, the number of companies placing employees on reduced working hours has helped to allay fears of the economic crisis turning into a jobs crisis in Germany.

Alone in February more than 600,000 employees were on reduced working hours as companies across the country cut production and prepared for the economic fallout from the recession.

Commerzbank economist Eckart Tuchtfeld expects the number of employees on shorter working hours to climb to about one million by the end of May.

"Naturally this will help to considerably relieve the labour market statistics," said Tuchtfeld.

This has also helped to underpin confidence among German consumers, whose mood has been remarkably resilient despite the deepening global economic uncertainty.

In the politically more important unadjusted terms, March German jobless figures is forecast to stagnate at the February level of about 3.550 million. (dpa)