Data provided by the Federal Employment Agency (FEA) showed that in January, the unemployment rate (seasonally adjusted) was 5.8%, while the December reading was revised from 5.9% to 5.8%. Economists had expected the unemployment rate to reach 5.9%.
Meanwhile, the number of unemployed fell by 2 thousand, to 2.694 million people, after an increase of 2 thousand in December (revised from +5 thousand). Consensus estimates suggested an increase of 11 thousand. In annual terms, the number of unemployed rose by 182 thousand in January.
The report also showed that in January the number of vacancies decreased by 66,000 compared to January 2023, to 699,00 vacancies.
"Employment and demand for labor are constant, meaning that the labor is stable at the start of the year despite the ongoing economic weakness," said Andrea Nahles, chairwoman of the FEA.
Earlier this month, Germany's Ifo institute downgraded its 2024 economic growth forecast, citing uncertainty caused by changes to the federal budget required by a court ruling. The Ifo institute now expects GDP growth of 0.7% this year instead of 0.9% previously forecast in mid-December. Germany's economy shrank by 0.3% in 2023. Some economists are even more pessimistic than Ifo, with the IMK institute predicting that the economy will shrink again this year by 0.3%.