Germany Records Highest Unemployment Level in 12 Years

Germany’s unemployment climbed to its highest level in 12 years, with the number of jobless people exceeding three million this month, official data showed on Friday, underscoring persistent weakness in the labor market despite signs of economic resilience in Europe’s largest economy.

According to figures released by the Federal Employment Agency, an additional 177,000 people became unemployed compared with December 2025, pushing the total number of job seekers to 3.08 million.

The unadjusted unemployment rate rose by 0.4% to 6.6%, marking the highest reading since 2013.

Andrea Nahles, head of the Federal Employment Agency, said the labor market is currently showing limited momentum, noting that unemployment typically rises at the start of the year for seasonal reasons.

On a seasonally adjusted basis, the number of unemployed remained steady at 2.976 million, while the adjusted unemployment rate held at 6.3%. Analysts had expected a modest increase of around 4,000 people.

Despite the deteriorating labor figures, Germany’s economy showed unexpected strength at the end of 2025. Gross domestic product grew by 0.3% in the fourth quarter, outperforming forecasts of 0.2%, according to the Federal Statistical Office.

On an annual basis, GDP expanded by 0.2%, allowing Germany to close 2025 on a positive note after a turbulent year marked by global trade disruptions.

Chancellor Friedrich Merz, who took office following two years of mild economic contraction, has pledged to revive growth through a significant increase in infrastructure and defense spending.

Economy Minister Katherina Reiche said Germany needs to focus on developing new drivers of growth, warning that the country’s traditional reliance on exports is no longer sufficient to sustain economic expansion.

Earlier this week, the government revised down its growth forecasts for both this year and next, reflecting ongoing uncertainty in global trade and domestic demand.

Adding to the mixed economic picture, preliminary data released on Friday showed annual inflation rising in January across five German states, North Rhine-Westphalia, Baden-Württemberg, Bavaria, Saxony, and Lower Saxony.

Inflation in those regions ranged between 2.0% and 2.3%, suggesting that national inflation likely increased this month as well.