FILE PHOTO: A job centre of Germany's Federal Labour Office is seen in Munich, Germany November 8, 2017. REUTERS/Michael Dalder/File Photo

By Maria Martinez

BERLIN (Reuters) -The number of unemployed people in Germany passed 3 million for the first time in a decade, labour office figures showed on Friday, as the labour market of Europe's biggest economy is squeezed by two years of economic contraction.

The mark was reached in seasonally unadjusted terms, with an increase of 46,000 in the number of people out of work.

However, when accounting for seasonal trends, the office said the number of unemployed decreased by 9,000 in seasonally adjusted terms to 2.96 million.

The seasonally adjusted jobless rate remained stable at 6.3%, in line with a forecast by analysts in a Reuters poll.

"The labour market is still marked by the economic downturn of recent years - however, there are also first signs of stabilisation," said labour office head Andrea Nahles.

The unexpected decline in the seasonally adjusted number comes as Germany battles persistent economic weakness. The tariffs announced by U.S. President Donald Trump could put the economy on track for a third year without growth for the first time in history.

Despite the monthly improvement, unemployment remains elevated compared with pre-pandemic levels.

The Ifo Employment Barometer fell slightly in August to 93.8 points, down from 94.0 points in July.

“The labour market is still stuck in crisis,” said Klaus Wohlrabe, head of surveys at Ifo. “The stagnating economy is making companies act cautiously when it comes to personnel planning.”

The German economy has contracted for two consecutive years. As labour market indicators tend to lag other economic indicators, the fall in gross domestic product in the second quarter also suggests weakness ahead.

(Reporting by Holger Hansen, Writing by Friederike Heine, Editing by Rachel More and Alex Richardson)