Federal Employment Agency releases July figures: Unemployment in Germany rises

Economic Causes

The agency also points to the economic situation. The economic weakness in several sectors continues, which is reflected in reduced demand for labor. At the same time, companies reported fewer vacancies compared to the previous year.

For the coming months, the Federal Employment Agency does not expect a quick turnaround. The seasonally adjusted figures continue to show stagnation in the labor market. Economists assume that the situation will be decided in the autumn, when the training and hiring phase for the fourth quarter begins.

Tasks of the Federal Employment Agency

The Federal Employment Agency is the largest German agency in the field of labor market policy. It operates unemployment insurance, pays unemployment benefits, and supports people in their job search and further training. Each month it publishes nationwide and regional labor market figures.

Labor market observers assess the July increase as seasonal, but emphasize that the three-million mark has not only economic but also structural causes. The share of long-term unemployed remains high.

In light of the development, the opposition in the Bundestag is calling for additional measures to stimulate the labor market. Labor Minister Bärbel Bas recently emphasized on several occasions that the federal government is working on a growth initiative that is also intended to strengthen the labor market.

Outlook and Political Reactions

The next detailed data will be published by the Federal Employment Agency at the end of August. It will then become clear whether the summer increase remains a temporary phenomenon or whether the trend solidifies.

In addition to the unemployment figures, the Federal Employment Agency also publishes data on employment, short-time work, and vacancies. These indicators are considered important gauges of the economic situation in Germany.

The three-million mark had been exceeded repeatedly in recent years, most recently during the crisis phases of the early 2020s. Economists regard a sustained increase over several months as a warning signal.

From the trade unions' perspective, the increase aggravates the situation for many employees who are already struggling with rising living costs. The demand for a substantial pay increase in the next round of collective bargaining is thereby further fueled.