German Unemployment Hits 12-Year High Despite Economic Resilience

The number of unemployed people in Germany rose above the 3 million mark this month, reaching its highest level in 12 years, underscoring persistent weakness in the labor market despite stronger-than-expected economic growth in recent months.

Data from Germany’s labor office on Friday showed unemployment increased by 177,000 in January to 3.08 million, pushing the unadjusted jobless rate up by 0.4 percentage points to 6.6%. The rise reflects lingering effects from years of economic stagnation, even as Europe’s largest economy has recently shown signs of resilience.

Chancellor Friedrich Merz has pledged to revive growth after two years of mild contraction, promising a sharp boost in infrastructure and defense spending. However, officials acknowledge that these measures are taking longer than expected to translate into tangible improvements in employment.

“There is currently little momentum in the labour market,” said labour office director Andrea Nahles, noting that unemployment rose sharply at the start of the year due to seasonal factors.

On a seasonally adjusted basis, conditions appeared slightly more stable. The number of unemployed was unchanged from December at 2.976 million, keeping the adjusted unemployment rate steady at 6.3%. Economists polled by Reuters had expected a modest increase of 4,000, suggesting the underlying labor market weakness remains contained for now, even as challenges persist.