The unemployment rate in Germany has increased at the beginning of the year despite an increase than expected in the number of unemployed, and the weakness of the largest economy in Europe affects the labor market.
The statements of the Federal Labor Office showed today, Friday, that the number of unemployed in Germany has risen less than expected in January.
The office stated that the number of unemployed increased by 11 thousand people after the amendment in light of the seasonal factors to 2.88 million, and analysts expected this number to rise by about 14 thousand, but the rate of jobs – which is affected by the seasonal factors – rose slightly to 6.2%
It is expected that the number of unemployed people will continue to increase this year, to exceed the barrier of 3 million at the beginning of 2025, for the first time in 10 years, in light of the dark economic expectations.
The Labor Office added that the number of vacancies reached 632,000 in January, a decrease of 66 thousand jobs from last year, indicating the slowdown in the demand for employment.
Deep crisis
And last Tuesday, the German Industries Union warned that the country’s economy is suffering from a deep crisis, as it is likely that the GDP is likely to shrink 0.1% this year, to tend to record a decline in growth for the third year in a row for the first time since the reunification of the country.
Meanwhile, the Union said it is expected that the eurozone will record 1.1%growth, and that the global economy will grow by 3.2%, indicating that Germany will remain one of the economically late countries in the unified region.
“The situation is very dangerous, as growth in the industry sector in particular suffers from a structural collapse,” said Berlin Peter Leipinger.
The increasing competition from abroad, high energy costs, and the continued high interest rates, as well as the mysterious economic prospects for the German economy, which shrinkled in 2024 for the second year in a row.
Germany’s economy recorded a contraction in 2024, as GDP in the largest economy in the eurozone declined by 0.2%, according to preliminary data from the Federal Statistics Agency (Destatus) after a contraction of 0.3% in 2023.
“The German economy is still pessimistic, while commenting on the German business climate index that rose this month.”
For his part, Ulrich Cather, the chief economist in the “Deca Bank” bank, said that there are no indications of a climate that is optimistic in the German economy.
“According to these figures, the German economy will remain stagnant in the first half of this year,” Katter added.
The business climate in Germany has somewhat improved at the beginning of the new year thanks to a better evaluation of the current situation.
The Evo Institute announced that its German business climate has increased by 0.4 points to 85.1 points, and this is the first increase after two consecutive stags.
Economists expected the index to score 84.8 points, yet the companies included in the Evo poll, which number about 9,000 companies were more pessimistic about the future, as the index of future business expectations continued to decline.
