Winter break sees uptick in German unemployment - as expected

The number of unemployed people in Germany rose by 33,000 in December compared to the previous month, reaching 2.807 million, the Federal Employment Agency said in Nuremberg on Friday, reported dpa.

The figure is 170,000 more than in December 2023, the agency said.

The unemployment rate increased by 0.1 percentage points compared to November, reaching 6%.

"In December, the winter break begins in the job market. As a result, unemployment and underemployment have increased in December, as is usual for this month," the agency's chairwoman, Andrea Nahles, said in Nuremberg.

Unemployment rises even when seasonally adjusted

The number of unemployed typically rises at the end of the year because temporary positions expire, fewer new employment contracts are signed before Christmas, and there is less work in weather-dependent industries like construction.

However, even when adjusted for seasonal factors, unemployment increased in December by 10,000 people compared to the previous month.

Meanwhile, the demand for workers decreased noticeably: In December, 654,000 jobs were reported to the Federal Employment Agency, 59,000 fewer than a year ago. For the current statistics, the agency analysed figures available up to December 12.

The number of people working reduced hours under a government-subsidized furlough scheme - known as short-time work in Germany - has increased significantly.

The latest data available to the Federal Employment Agency is for October. In that month, the agency paid short-time work compensation due to economic conditions for 287,000 employees, up from 225,000 in September and 165,000 in August.

From December 1 to 26, applications for an additional 55,000 employees were submitted, but it cannot be said with certainty whether these will actually make use of the short-time work compensation.