The German labor market is showing only a weak autumn recovery so far. Although the number of unemployed fell below the symbolic three-million mark in September, which it had exceeded in August for the first time in more than ten years, the labor market "continues to lack the necessary stimulus for a stronger recovery," explained Andrea Nahles, head of the Federal Employment Agency (BA).
The unemployment rate fell by 0.1 percentage points to 6.3 percent in September, the Federal Employment Agency announced in Nuremberg on Tuesday. The number of unemployed fell by 70,000 to 2.955 million. Adjusted for seasonal effects, however, it was 14,000 higher than the previous month; compared to September of last year, there were 148,000 more unemployed people.
The risk of becoming unemployed due to job loss is comparatively low, but "steadily increasing," according to the latest monthly report from the Federal Employment Agency. At the same time, the chances of ending unemployment by taking up employment are at a "historically low level." Employers are "still reluctant to report new vacancies."
Year-on-year, the number of job vacancies reported to the Federal Employment Agency fell by 66,000 to 630,000. The Federal Employment Agency's job index, which reflects demand for personnel in Germany, remained unchanged at 98 points in September. Compared to the same month last year, the indicator is down nine points – according to the Federal Employment Agency, it is even 40 points below the all-time high of May 2022.
"Despite a slight recovery in the fall, the labor market situation remains tense," said Federal Labor Minister Bärbel Bas (SPD) commenting on the current labor market figures, pointing to the consequences of the Russian war of aggression and the global economic uncertainties that continue to weigh on the German economy. "It is all the more important that the federal government has laid the foundations for reviving the economy and securing jobs with the €500 billion investment package," she added.
In close cooperation with companies, it is now necessary to "shape the necessary structural change in such a way that value creation and jobs are maintained at the business location in the long term," explained the minister. Employers' Association President Rainer Dulger called for reforms in light of the current figures. "The balance in the labor market is tipping," he warned. "Employment is growing practically only in the public sector, education, and healthcare." In the manufacturing sector, however, it is declining. "But that is the backbone of our economy."
Reforms are therefore "not a political choice, but an economic duty," Dulger demanded. What is needed specifically is "genuine debureaucratization, forward-looking welfare state reforms, and a priority for work rather than non-work." Green Party MP Sylvia Rietenberg advocated for a "forward-looking policy" that must bring together "further training, the recruitment of skilled workers, and social security."
BA head Nahles called for a stronger focus on artificial intelligence (AI) in the workplace on Welt TV. The path of "modernization, digitalization, and the combination of know-how with AI in Germany" must be consistently pursued, she said. This could provide a decisive impetus.
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