Germany: Number of Unemployed Highest in 10 Years
The number of unemployed people in Germany reached almost three million in January, according to figures from Germany's Federal Employment Agency.
While such upticks are typical for the first month of the year, the 2025 figure is the highest since January 2015.
Employers have blamed a range of headwinds that have hampered German economic growth.
How the figures stack up
The unemployment rate rose by 0.4% since December to 6.4%, the preliminary figures show.
That meant the 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 last time the number of unemployed in January was higher was in 2015 when there were 3.032 million.
Such a sharp month-on-month rise in January is typical, with many seasonal employment contracts coming to an end with the New Year and weather-dependent work, such as in construction, put on hold.
February often shows a stable trend, before the first spring recovery can begin in March.
What employers have said
"The labor market figures are an alarm signal," said the president of Gerrmany's Confederation of German Employers' Associations, Rainer Dulger.
"The economic and structural weakness of the German economy is hitting the labor market with full force. It is five minutes to twelve."
Dulger said there needed to be a reduction in bureaucracy, reforms to non-wage labor costs, and lower energy prices.
"Then Germany will be back on a growth path. Only then will the turnaround in the labor market be successful."
Germany's Mechanical Engineering Industry Association said it hoped for reforms after the country's February 23 general election.
"One in four companies in the mechanical engineering sector is planning to cut jobs in the next six months, as our economic survey shows," said VDMA managing executive Thilo Brodtmann. "Companies are doing everything they can to retain their core workforce and are also investing in training and promoting young talent."
"It is, therefore, all the more important to bring social security contributions back down to an acceptable level in order to reduce labor costs."
Gloomy news on retail sales
There was more glum German economic news with figures from the Federal Statistical Office on Friday showing that retail sales fell unexpectedly in December.
Sales decreased by 1.6% in December compared with the previous month when economists had forecast sales to remain flat.
The fall is indicative of a 1.7% drop in food sales and a 0.7% drop in non-food retail sales, although overall retail sales increased by 1.8% on a yearly basis.
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