Unemployment in Germany increased by less than originally expected in January, new data has revealed.

The European Union member's Federal Labor Office disclosed that joblessness rose by 7,000 individuals last month, which is 11,000 less than Dow Jones economists had predicted before the release of data.

In addition, the public agency disclosed that the number of Germans in employment declined by 1.3 per cent during January, which is equivalent to a decline of 543,000 jobs.

However, the office noted that this decrease is in line with the usual seasonal pattern recorded during the winter months.

In an effort to temper the declines witnessed in the German labor market, the government has extended incentives to encourage companies to keep workers on their payrolls.

Andreas Scheyerle, economist at Frankfurt-based Dekabank, explained that businesses are increasingly relying on temporary employees to get them through the recession.

He told Bloomberg: "Companies have instruments at their disposal to maintain staffing levels when business contracts, for example short-time work."

Last week, Germany's labor minister Ursula von der Leyen predicted that the country's unemployment rate will rise further in 2010.