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German unemployment rises less than expected in September

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– German unemployment rose in September but less than expected, slowly showing the first cracks in what had been a very resilient labour market.

The Federal Labour Office said on Friday that the number of people out of work increased by 10,000 in seasonally adjusted terms to 2.642 million. Analysts polled by had expected that figure to rise by 15,000.

Jobless claims rose for the eighth straight month. “We suspect that this trend will continue and expect further increases in unemployment to push the jobless rate higher over the coming months,” said Melanie Debono, senior Europe economist at Pantheon Macroeconomics.

The seasonally adjusted jobless rate remained stable at 5.7% in September.

In non-seasonally adjusted terms, the number of people out of work fell by 69,000 to 2.627 million.

“The figures on the labour market show that it remains stable despite the current economic environment,” German Labour Minister Hubertus Heil said. He noted, though, that the usual revival in the labour market expected in the fall will be weaker this year.

In September, there were 761,000 job openings, 113,000 fewer than a year ago, the Federal Labour Office said, noting a slowdown in labour demand.

German companies’ willingness to hire new staff took a hit in September, data from the Ifo Institute showed on Wednesday. The metric fell to 95.8 points from 97.0 points in August – its lowest point since February 2021 – due to a lack of orders, with the trade, construction and services sectors also losing traction, Ifo said in a statement.

The German economy is seen as at risk of sliding into its second recession in a year after shrinking in the last quarter of 2022 and the first quarter of 2023.

“Companies’ willingness to hire new staff will presumably rise again once the economy recovers,” said Ifo head of surveys Klaus Wohlrabe.

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