German unemployment stays above 3 million as weak economy takes toll

[BERLIN] The number of unemployed people in Germany fell slightly but remained above three million according to labour office figures on Friday (Feb 27), as years of economic stagnation took a toll on the jobs market in Europe’s largest economy.

The data underscores the challenge facing Chancellor Friedrich Merz’s government, which has vowed to boost growth after two years of contraction and will fight several state elections this year, starting next month.

Labour office figures showed the number of unemployed people at 3.07 million, a slight decrease from the previous month but 81,000 more than a year ago.

In seasonally adjusted terms, the jobless figure rose by 1,000 to 2.977 million in February, up from 2.976 million the month before. Analysts and economists had predicted an increase of 2,000 in a Reuters poll. The seasonally adjusted jobless rate was unchanged at 6.3 per cent compared with a month earlier, in line with the forecast.

“Even at the end of the winter break, the labour market is still struggling to gain momentum,” labour office head Andrea Nahles said in a statement.

Merz has pledged to pull Germany out of its downturn by sharply boosting infrastructure and defence spending, but the impact of those measures is taking longer than expected to materialise on the ground.

“...With the economy effectively stagnating for more than five years and industry facing severe structural challenges, a deterioration in the labour market was inevitable,” said a note from ING THINK economic and financial analysis.

“All in all, today’s labour market report sends a mixed message but definitely no signs of a turning point. Instead, the gradual worsening looks set to continue.”

Among several other sets of economic indicators released on Friday, inflation slipped below 2 per cent in several German states in February, pointing to a lower national rate and following a softening of price growth across the eurozone as a whole.

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Real wages continued to recover, up 1.9 per cent in 2025 and 2.9 per cent in 2024, but were still below the level seen in 2019 as the inflation shocks after the start of the pandemic and Russia’s 2022 invasion of Ukraine ate into spending power. REUTERS