Data provided by the Federal Employment Agency (FEA) showed that in December, the unemployment rate (seasonally adjusted) increased to 5.9% (highest level since May 2021) from 5.8% in November (revised from 5.9%). The December value coincided with economists' forecasts.
Meanwhile, the number of unemployed rose by 5 thousand, to 2.703 million people, after an increase of 21 thousand in November (revised from +22 thousand). Consensus estimates suggested an increase of 20 thousand. In annual terms, the number of unemployed rose by 186 thousand in December.
The report also showed that in December the number of vacancies decreased by 68,141 compared to December 2022, to 712,945 vacancies.
"The labor market is still holding up well in terms of the extent of the burdens and uncertainties, - said Andrea Nahles, head of Germany’s Federal Employment Agency. - 2023 is also one of the years with the lowest unemployment since reunification”.
Overall, the latest data indicated that the jobs market has remained relatively resilient to the rapid rise in interest rates that's weighing down the eurozone economy. While the unemployment rate has edged higher in recent months, many companies are still struggling to find staff. The German government's current economic forecast still assumes an increase in GDP of 1.3% for 2024. But nearly all of the most respected economic researchers expect German GDP growth of well below 1% for 2024. The Ifo institute now sees the German economy growing by just 0.9% in 2024.