Rise in Unemployment Levels Acutely in July, Germany
The unemployment rate in Germany rose slightly in July 2025, reaching 6.3% and nearly 3 million unemployed persons, primarily due to seasonal factors related to the summer holiday period.
According to the Federal Employment Agency, the number of job vacancies decreased by 75,000 compared to the same month last year, with 628,000 vacancies reported in July 2025. Companies remain cautious about reporting new jobs, and employment subject to social security contributions is barely increasing.
The rise in unemployment is not limited to new job vacancies. The number of unemployed people increased by 171,000 compared to the same month last year, and the number of job seekers increased by 65,000 to a total of 2.979 million.
Andrea Nahles, head of the Federal Employment Agency, attributed the rise in unemployment to the start of the summer break. During this period, many temporary job contracts end, and hiring activity decreases, leading to fewer job vacancies and a higher number of unemployed individuals.
Despite the rise, unemployment remains below levels seen in previous years and is expected to moderate. Forecasts predict a slight increase toward 6.4% by the end of Q3 2025, with a gradual decline into 2026 and 2027.
The German government’s large-scale spending surge aimed at boosting the economy is expected to have a delayed impact, with labor market improvements unlikely before summer 2026.
Underemployment, which includes labor market policy and short-term work incapacity, decreased seasonally adjusted by 10,000 persons compared to the previous month in July 2025. In July 2025, underemployment was at 3.609 million, which is 31,000 more than a year ago.
In addition, there were still 182,000 unfilled vocational training positions to be filled, and 414,000 applicants for vocational training positions have been registered with the employment agencies and job centers, which is 12,000 more than in the same period last year.
The BA-X index, an indicator of the demand for personnel in Germany, decreased in July 2025 by one point to 98 points. In July 2025, 991,000 people received unemployment benefits.
In summary, the July 2025 rise in German unemployment is mainly a seasonal, temporary increase tied to summer vacation effects and reduced hiring, with no immediate signs of a broader labor market downturn. The labor market outlook anticipates gradual improvement starting mid-2026 when government stimulus measures materialize.
Policy-and-legislation: The German government's large-scale spending surge aimed at boosting the economy is expected to have a delayed impact, with labor market improvements unlikely before summer 2026.
General-news: Despite the rise in unemployment, underemployment, which includes labor market policy and short-term work incapacity, decreased seasonally adjusted by 10,000 persons compared to the previous month in July 2025.
