Finance
German unemployment rate rises with economic malaise
Published by Global Banking and Finance Review
Posted on January 31, 2025
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By Maria Martinez
BERLIN (Reuters) -Germany's unemployment rate rose at the start of the year, despite a smaller than expected increase in the number of people out of work, as the weakness of Europe's biggest economy takes its toll in the labour market.
The number of people out of work in Germany rose less than expected in January, federal labour office figures showed on Friday.
The office said the number of unemployed increased by 11,000 in seasonally adjusted terms to 2.88 million. Analysts polled by Reuters had expected that figure to rise by 14,000.
However, the seasonally adjusted job rate rose slightly to 6.2%.
"Unemployment and underemployment increased significantly at the start of the year, as is usual for this month," said labour office head Andrea Nahles.
Due to the subdued economic outlook, the number of unemployed is expected to continue to rise this year, exceeding the 3 million mark for the first time in 10 years at the beginning of 2025.
Almost all branches of industry in Germany want to reduce their headcount, Ifo institute's survey showed on Thursday.
"The situation on the labour market remains tense," said Klaus Wohlrabe, head of surveys at Ifo. "There is still a tendency for companies to reduce their workforce."
There were 632,000 job openings in January, 66,000 fewer than a year ago, showing a slowdown in labour demand, the federal labour office said.
(Reporting by Maria Martinez, Writing by Miranda Murray, Editing by Friederike Heine and Andrey Sychev)