Germany’s unemployment rate remained stable at 6.1% in December, despite a slight increase of 10,000 unemployed individuals. The job market has been affected by economic sluggishness, with a total of 2.81 million unemployed, marking a 0.3 percentage point rise from the previous year. Long-term unemployment has surged by 41% since late 2019. As early elections approach, economic challenges loom large, with job growth concentrated in the service sector, while industrial sectors anticipate further cuts.
Stability in Germany’s Unemployment Rate Amid Economic Challenges
In December, Germany’s unemployment rate held steady at 6.1%, marking the conclusion of a challenging year that has impacted the labor market significantly. An estimate released on Friday noted a slight increase of 10,000 unemployed individuals for the month, a figure that came in lower than anticipated. Traditionally, the winter break tends to exert a negative influence on employment, as highlighted by the seasonally adjusted statistics from the Employment Agency. Analysts had predicted a rise in the unemployment rate to 6.2%, with an expectation of 17,500 additional unemployed persons in December.
Long-Term Trends and Future Projections
Throughout 2024, the ongoing sluggishness of the leading European economy has made a lasting impression on the job market, as pointed out by Andrea Nahles, the president of the Employment Agency. Despite the unemployment rate remaining relatively low, the raw data revealed an increase of 33,000 unemployed individuals in December, bringing the overall number to 2.81 million. Additionally, the annual unemployment rate saw a rise of 0.3 percentage points from 2023 to 2024, reflecting a concerning trend.
Martin Müller, an expert at the public bank KfW, highlights a more alarming long-term outlook, noting a 29% increase in the number of unemployed since the low point in November 2019, totaling 627,000 additional job seekers. The rise in long-term unemployment is even steeper, at 41%. Economists predict that the challenges facing the German economy, which has been in decline for two years, will continue, with the Federal Bank of Germany revising its growth forecasts downward for 2025 and 2026.
These economic struggles are critical considerations for voters as they prepare for early legislative elections on February 23, following the collapse of Chancellor Olaf Scholz’s coalition. German economist Bert Rürup commented on the gravity of the situation, stating that Germany has not faced such a prolonged and difficult crisis since World War II.
Currently, the unemployment rate remains relatively contained in a nation with approximately 46.1 million active workers in 2024, the highest number since reunification in 1990, according to the Federal Statistical Office Destatis. The workforce increased by 72,000 compared to the previous year, reflecting a 0.2% rise. The majority of job growth was seen in the service sector, whereas the industrial and construction fields experienced job losses. A survey released by the IW economic institute at the end of December indicated that several industrial sectors, including chemicals and automotive, are bracing for further job cuts in 2025.