German Unemployment Rises by 12,000 as Labor Market Stays Weak

German unemployment increased by 12,000 in September after seasonal adjustment, extending the labor market’s gradual deterioration even as the headline number of unemployed people fell below 3 million.

The unadjusted total dropped by 67,000 from August to 2.994 million, reflecting the usual autumn pickup after the summer period. Germany’s unemployment rate also fell by 0.1 percentage point to 6.4%. Compared with September 2025, however, the number of unemployed people was 40,000 higher.

September’s seasonal improvement was weaker than usual

The Federal Employment Agency said in its September labor-market assessment that the autumn improvement had begun without much momentum and that the broader economic improvement was not yet showing up in the jobs market. The agency said the normal September decline in unemployment was comparatively weak, which is why the seasonally adjusted measure moved in the opposite direction and rose by 12,000.

Other measures were mixed. Underemployment excluding short-time work fell by 7,000 after seasonal adjustment in September, but remained 25,000 above its level a year earlier. The agency also said the risk of becoming unemployed after losing a job has been rising for some time and is back around its pre-pandemic level. At the same time, the chance of leaving unemployment by taking a job remains historically low.

Long-term unemployment is another sign of persistent weakness. About 1.07 million people had been unemployed for more than 12 months in September, representing 35.7% of all unemployed people. That was 22,000 more than a year earlier. The increase was concentrated partly in the unemployment-insurance system, where joblessness has been developing less favorably than in the SGB II basic-security system.

Monthly flows show that the labor market is still moving, but not in a way that points to a strong rebound. Around 605,000 people became unemployed during September, 58,000 more than in the same month last year. About 672,000 left unemployment, up by 54,000 from a year earlier. Those gross movements are large, yet the adjusted stock of unemployed people continued to edge upward.

Employment and hiring demand remain soft

Weakness is also visible in employment data. The number of employed people in Germany fell by 29,000 in August after seasonal adjustment, according to figures cited by the Federal Employment Agency. Social-security employment, for which the latest agency estimate is for July, declined by 12,000 after seasonal adjustment and stood at 34.68 million. That was 84,000 below the level a year earlier.

The composition of employment has shifted as well. Social-security part-time employment rose by 152,000 from a year earlier to 10.99 million in July, while full-time employment fell by 236,000 to 23.69 million. The agency said that since the start of 2024, only part-time employment has been growing, while full-time employment has been declining.

Demand for new workers remains restrained. Employers had 660,000 vacancies registered with the Federal Employment Agency in September. That stock was 30,000 higher than a year earlier on an unadjusted basis, but the seasonally adjusted level has largely stagnated over the past six months. Employers registered 132,000 new vacancies during September, and the agency said new postings remain low by longer-term standards.

A broader IAB survey of employers points in the same direction. Total vacancies across the economy were estimated at 1.02 million in the second quarter, down 130,000 from the previous quarter and 34,000 from a year earlier. The Federal Employment Agency also noted that employers continue to face difficulty filling some roles despite higher unemployment. Completed vacancies took an average of 156 days to fill over the 12 months through September, roughly 70 days longer than a decade earlier. Shortages remain concentrated in areas such as nursing, medical occupations, construction and skilled trades rather than across the whole economy.

Forward indicators point to limited near-term relief

The latest IAB Labor Market Barometer improved only slightly in September, rising 0.1 point to 99.6. Values below 100 indicate a negative outlook. Its unemployment component rose to 99.9, close to neutral, but the employment component fell to 99.3. IAB said the employment outlook is weaker than the unemployment outlook, with demographic change reducing the available workforce and industrial transformation and economic uncertainty continuing to weigh on hiring.

The labor data are therefore lagging behind the broader economy. Germany’s real gross domestic product grew 0.3% in the second quarter after seasonal and calendar adjustment, helped by exports and government demand. The Federal Employment Agency expects the economic recovery to have continued in the third quarter at a slower pace, while the Bundesbank has also said activity is likely to expand only slightly during the quarter.

That divergence matters because an improving economy does not immediately translate into stronger hiring. Industrial employment is still under pressure, job postings remain subdued, and the share of long-term unemployed people is elevated. The next IAB labor-market barometer is scheduled for October 28, followed by the Federal Employment Agency’s October labor-market release on October 30, which will show whether the adjusted rise in unemployment begins to level off or continues.