Unemployment in Germany rose in January, climbing by 0.4 percentage points since December to 6.4%, according to preliminary figures from Germany’s Federal Employment Agency released on Friday.
The total number of unemployed people in the country was 187,000 higher than in January 2024, reaching a total of 2.993 million, the agency reported.
The sharp rise in January is typical for the time of year, as many temporary employment contracts end and weather-dependent jobs, such as in construction, are lost at the same time.
A stable trend is then often observed in February, before the first spring recovery can begin in March.
For its January statistics, the agency used data that was available until January 15.
“Unemployment and underemployment increased significantly at the start of the year, as is usual this month,” said Andrea Nahles, the chairwoman of the Federal Employment Agency. “Although employment growth is continuing, it is increasingly losing momentum.”
Germany’s economy has been stuck in an extended slump, recording two straight years of decline for the first time in more than two decades.
Economists do not expect a major rebound anytime soon, as German businesses continue to face intense pressure from global competition, high energy prices and rising labour costs.
But the German labour market has so far held up better than the overall economy, with unemployment rising only slowly.
German Labour Minister Hubertus Heil said political action is needed to boost the economy and address structural problems that are threatening jobs.
Heil said on Friday that a “Made in Germany” subsidy could provide targeted support for private sector investment.
“In addition, our manufacturing industry in particular needs competitive energy prices, above all by reducing the costs of grid expansion,” Heil said in a statement from his ministry.
The leader of Germany’s influential Confederation of German Employers’ Associations (BDA) called for Germany and the broader European Union to continue pushing for free trade worldwide.
“The labour market figures are an alarm signal. The economic and structural weakness of the German economy is hitting the labour market with full force,” Rainer Dulger said.
Dulger called for a reduction in government bureaucracy and steps to bring down energy prices for businesses.
According to government figures, short-time work, where companies reduce hours for workers and tap partial benefits, has recently increased significantly.
According to projections by the Federal Employment Agency, 293,000 employees were paid cyclical short-time working benefits in November, compared to 263,000 in October and 221,000 in September.
More up-to-date data are not reliably available, the agency said.
The demand for labour continued to decline, according to the preliminary figures. In January, 632,000 vacancies were registered with the Federal Employment Agency, 66,000 fewer than a year ago.
According to the figures, 33,000 applicants for company-based apprenticeships were still unplaced on the training market in January, while 20,000 were looking for a better alternative.
At the same time, companies reported that 15,000 training places were still unfilled.
