Data provided by the Federal Employment Agency (FEA) showed that in March, the unemployment rate (seasonally adjusted) was 5.9%, remaining unchanged compared to February and confirming economists' forecasts. However, the latest reading was the highest since May 2021. Meanwhile, the number of unemployed grew by 4 thousand, to 2.719 million people, after an increase of 12 thousand in February (revised from +11 thousand). Consensus estimates suggested an increase of 10 thousand. The weaker increase is another evidence of labor-market resilience that may help underpin a modest economic recovery later this year. In annual terms, the number of unemployed rose by 180 thousand in March.
The report also showed that in March, the number of vacancies decreased by 70,000 compared to March 2023, to 707,00 vacancies.
"Unemployment and underemployment did fall in March, but less than usual this month. The economic downturn is therefore still having an impact on the labor market. Overall, however, the labor market is holding up relatively well", said Andrea Nahles, chairwoman of the FEA.
Yesterday, the leading German economic institutions said that high interest rates, weak global demand and political uncertainty negatively affect the prospects for the German economy. Against this background, they revised down their forecast for GDP growth for 2024 to 0.1% from 1.3%. In terms of the labor market outlook, the institutes forecast the unemployment rate to be 5.8% in 2024 and fall to 5.5% in 2025.