Recession weighs on Germany's labour market

The number of unemployed increased by 10,000, less than expected, data from the Federal Employment Agency showed.

Analysts polled by FactSet had expected the number of unemployed to rise to 6.2%. The more modest increase came despite the fact that the winter holiday usually has a negative impact on the labor market.

Europe's largest economy appears to have suffered a second consecutive year of recession, and BA head Andrea Nahles said that throughout 2024 "the persistent slowdown in growth has deeply affected the labour market". The market "has nevertheless remained stable for the most part", he added.

The number of people out of work rose by 33,000 in December to 2.81 million. On an annual basis, unemployment rose 0.3%, in absolute terms.

Germans will head to the polls on February 23 for snap parliamentary elections triggered by the collapse of Chancellor Olaf Scholz's centre-left coalition in November.

The political instability comes at a time when the economy is suffering the "worst and longest crisis" in its recent history, economist Bert Rürup told Bild newspaper.

The woes of the country's leading industries point to "the end of our success as an exporting country", he argued.

Meanwhile, the official statistics agency Destatis reported that the number of people working in Germany in 2024 will be 46.1 million, the largest number since reunification in 1990.

Most of the new jobs are in the service sector, while industry and construction have seen cuts. | BGNES