For the first time in more than ten years, the number of unemployed in Germany has exceeded the three million mark. The Federal Employment Agency (BA) reported a month-on-month increase of 46,000 to 3.025 million unemployed people in August, the agency announced on Friday. This is not only due to the usual seasonal changes in the labor market during the summer, but also to the weakening economy.
As the Federal Employment Agency further announced on Friday, the number of unemployed rose by 153,000 compared to August 2024. The unemployment rate increased by 0.1 percentage points to 6.4 percent. "In August, what we expected happened: Due to the summer break, unemployment rose to over three million," said BA head Andrea Nahles. Furthermore, the labor market "continues to be affected by the economic downturn of recent years," she added. However, there are also "initial signs of stabilization," Nahles explained.
She added that the data reflected weakness among Germany's manufacturers. "That is an important motor for the Germany economy," she said, but added the sector was currently "weakening". Battered by high energy costs and increasingly fierce Chinese competition, German manufacturers were struggling even before US President Donald Trump erected new tariff walls.
Over 110,000 jobs have been lost in German industry in the past year alone, a report released Tuesday by consultancy EY said, with about 50,000 of them coming from the car industry.
Federal Labor Minister Bärbel Bas (SPD) stated that "global economic uncertainty and the Russian war of aggression against Ukraine are still leading to economic weakness." She added that "security and strong incentives for investment and employment are necessary to generate economic growth again and inject momentum into the labor market." The federal government is countering this with, among other things, the multi-billion euro "investment booster" for companies.
According to the Federal Employment Agency's detailed monthly labor market report, an increase in unemployment in August is "normal." Compared to previous years, however, it was "moderate" this time. Seasonally adjusted, the number of unemployed in August actually fell by 9,000 compared to the previous month, July 2025.
Nevertheless, with the number of unemployed exceeding three million, a symbolic threshold has now been crossed: The last time the number of unemployed exceeded this figure was in February 2015, when the Federal Employment Agency reported 3.017 million. The fact that the number of unemployed exceeded three million in an August dates back to 2010.
On Friday, business representatives in particular therefore urged rapid countermeasures: "Germany needs a genuine 'autumn of reforms,'" demanded employers' association president Rainer Dulger, referring to "the future viability of social insurance" and "corrections in basic social security."
The German Mechanical and Plant Engineering Association (VDMA) declared that Germany needs "a fundamental turnaround in labor market policy." "Costs must be reduced, and rigid regulations must be relaxed," said VDMA Executive Director Thilo Brodtmann. Without a "reduction in social spending and tangible labor market reforms," the situation will worsen further, he warned.
Economist Stephanie Schoenwald of KfW Research, however, pointed out that the increase in unemployment in August was "primarily seasonal" – "and we are far from the peaks of the 2000s," she added. With the expected upturn in the coming year, "the chances of an improvement in the labor market situation are also good," she explained.
Andreas Audretsch, deputy chairman of the Green Party parliamentary group in the Bundestag, viewed the new figures from the Federal Employment Agency as a "warning shot" for the federal government. Chancellor Friedrich Merz and Economics Minister Katherina Reiche (both CDU) must "finally commit to Germany as an industrial location" and "first and foremost ensure effective trade protection in Europe," he demanded. And the federal government must "invest more in job integration and further training for the unemployed" – because well-educated people are "the cornerstone of future growth."
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