Aug. 31 (Bloomberg) -- Germany's jobless rate was probably unchanged in August after declining the previous two months, while French unemployment held close to a 5 1/2-year high in July amid surging energy costs, surveys of economists showed.

The German rate may have held at 11.6 percent, adjusted for seasonal swings, according to the median of 33 economists in a Bloomberg survey. In France, 10.1 percent of the labor force was out of a job, the median of 20 estimates showed.

Companies across the economy of the dozen nations sharing the euro have been reluctant to boost hiring as the 55 percent increase in oil prices this year crimped profits. Volkswagen AG, Europe's largest carmaker, persuaded unions to keep labor costs down and said Aug. 24 it still faces ``challenges'' with costs.

``Companies don't need to increase capacity or add workers for now,'' said Juergen Michels, a senior economist at Citigroup Global Markets in London. ``We can't expect much of a change in unemployment over coming months, with oil prices weighing on economic growth.''

The Nuremberg-based Federal Labor Agency is scheduled to release the German unemployment figures today at 9:55 a.m. Insee, the French statistics office, will report at 8:45 a.m.

The number of Germans out of work, unadjusted for seasonal swings, fell by 44,000 in August to 4.73 million, the daily Tagesspiegel reported yesterday without saying where it got the information. The jobless rate on that basis fell to 11.4 percent from 11.5 percent, the report said.

Crude oil for October delivery reached a record $70.80 a barrel in New York on Aug. 29. Rising energy costs are also curbing households' purchasing power, the biggest part of the euro region's economy, leaving growth dependent on exports after a second-quarter slowdown.

Slowing Growth

Economic growth in Germany ground to a halt in the three months through June, in part because consumer spending declined for a second quarter, government figures showed Aug. 23. The French economy slowed to 0.1 percent quarter-on-quarter, from 0.4 percent in the first three months.

While German unemployment has fallen from a post-World War II record of 12 percent in March, the rate remains more than twice that of the U.S., with 5 percent.

In France, unemployment has held at or above 10 percent since October 2003, as companies including Schneider Electric SA, the world's biggest maker of circuit breakers, cut jobs. The French jobless rate held at a 5 1/2-year high of 10.2 percent from March through May.

Volkswagen `Challenges'

Volkswagen Chief Executive Officer Bernd Pischetsrieder told analysts in a conference call Aug. 24 that there are ``very real challenges'' confronting the company in the second half of the year amid an effort to contain spending. The Wolfsburg-based company has extracted a wage freeze from its 100,000 German workers that will save 2 billion euros ($2.4 billion) annually in exchange for job guarantees through 2011.

The euro's 10 percent decline against the dollar this year is bolstering optimism among executives by making exports more competitive. German investor confidence climbed to a 17-month high in August and an index of consumer confidence rose.

``It seems that we're in a phase where growth is about to stabilize but is still too weak to create jobs,'' Citigroup's Michels said. ``We'd need a couple of quarters with positive economic data for rising employment.''

The European Commission said July 18 that economic growth in the region will rebound in the second half after a ``disappointingly slow'' second quarter. The commission now predicts expansion of 1.3 percent this year, down from a 1.6 percent forecast in April. Euro-region growth is set to lag behind that of the U.S. for the 13th year in 14.

To contact the reporter on this story: Simone Meier in Paris at smeier@bloomberg.net

Last Updated: August 30, 2005 19:05 EDT