Joblessness climbs nearly to three million in July's span
Unemployment in Germany Remains Elevated in July 2024
Germany's unemployment rate has risen to 6.3% in July 2024, marking the highest rate since September 2020. The number of unemployed individuals is expected to exceed 3 million, reflecting ongoing economic weakness and cautious hiring by companies[1][2].
Despite this, the rise in unemployment has been less than initially expected, indicating some resilience amid a fragile global economic climate. The labor market exhibits a paradox with high unemployment alongside persistent labor shortages in sectors like manufacturing, logistics, and services[2]. About 28% of companies report shortages, supporting wage growth and private consumption[2].
The number of job openings has been declining compared to the previous year, signalling slower hiring demand overall[1]. However, structural strengths such as rising nominal wages (projected +3.9% in 2025) and easing inflation support domestic demand[2].
Seasonally adjusted unemployment is reported variably around 3.6-3.7%, with minor changes in employment numbers, but the official rate for broader labor market figures remains near 6.3%[3][4]. Eurozone unemployment, including Germany, is expected to remain relatively stable, with Germany having one of the lowest rates among the largest Eurozone countries[4].
Looking ahead, the unemployment rate is expected to remain close to current levels (6.3-6.4%) through the end of the current quarter and likely beyond, reflecting ongoing economic challenges and cautious hiring as companies adjust to slower growth and external uncertainties[1][2]. Job market weakness is anticipated to persist with pressures on employment growth, but structural factors such as wage growth and labor shortages in key sectors provide some buffer against a sharper rise in unemployment[2].
The southern states of Bavaria and Baden-Württemberg have the lowest unemployment rates at 4.0%, while the city-states of Bremen and Berlin have the highest unemployment rates at 11.8% and 10.3% respectively[1]. In July, 991,000 people received unemployment benefits, and 140,000 were still without a placement[1]. Since October last year, 414,000 young people have applied for apprenticeships at employment agencies[1].
Anja Piel, a board member of the German Trade Union Confederation, has called on the federal government to take countermeasures. She emphasized the importance of well-funded concepts for labor market policy and further training[1]. Piel also advocated against cutting back on job centers and employment agencies[1].
Sources:
[1] Federal Employment Agency statistics up to July 14, 2024. [2] Deutsche Bundesbank Monthly Report, July 2024. [3] Ifo Institute for Economic Research, Monthly Report, July 2024. [4] European Central Bank Monthly Bulletin, July 2024.
- Amidst the rising unemployment in Germany, there is ongoing debate about the government's policy-and-legislation regarding labor market issues, with trade unions advocating for well-funded concepts and emphasizing the need for further training.
- Despite the overall weakened job market in Germany, there are still sectors like manufacturing, logistics, and services experiencing labor shortages, a paradox that is contributing to wage growth and private consumption in the country.
