German Joblessness Rises Above 3 Million as Economic Weakness Persists

Germany’s labor market showed renewed signs of strain in September, with unemployment rising more than expected, underscoring the challenges facing Europe’s largest economy as it grapples with its steepest downturn in decades.

According to data released by the Federal Labour Office on Tuesday, the number of unemployed people rose by 14,000 in seasonally adjusted terms to 2.98 million, surpassing the 8,000 increase forecast by analysts in a Reuters poll. The jobless rate held steady at 6.3%, in line with expectations.

In non-adjusted terms, unemployment crossed the 3 million mark for the first time in a decade, highlighting the severity of the slowdown.

“The labour market continues to lack the necessary impetus for a stronger recovery,” said Andrea Nahles, head of the Labour Office.

Germany is facing the prospect of a third straight year of economic contraction — a historic first — driven in part by the drag from U.S. President Donald Trump’s tariffs, which have weighed heavily on exports and industrial output.

The economy shrank by 0.3% in the second quarter compared with the first three months of the year, pointing to continued weakness in employment, which typically lags broader economic activity.

Chancellor Friedrich Merz has pledged to reverse the downturn through a sharp increase in infrastructure and defence spending, but economists caution that these measures are taking longer than anticipated to filter through into improved labor market conditions.