German unemployment rose more than expected in September, the labor office said, according to Reuters

By Maria Martinez

BERLIN (Reuters) – Germany’s jobless rate rose more than expected in September, the latest sign of challenges facing Europe’s biggest economy, figures from the federal labor office showed on Friday.

The bureau said the number of unemployed rose by 17,000 in seasonally adjusted terms to 2.82 million. Analysts polled by Reuters had expected the figure to rise by 12,000.

The seasonally adjusted unemployment rate remained steady at 6.0%.

There were 696,000 job openings in September, down 65,000 from a year ago, the Federal Labor Bureau said.

Economists estimate that Germany’s economy, which contracted by 0.1% in the second quarter, could contract again in the third quarter. A recession is normally defined as two consecutive quarters of contraction.

Amid economic uncertainty, companies in Germany are becoming increasingly cautious in personnel planning, the Ifo Institute said on Friday.

The Ifo employment barometer fell to 94.0 points in September from 94.8 points in August.

“The structural problems of the German economy are gradually taking their toll on the labor market,” said Klaus Wohlrabe, the head of Ifo polls, adding that companies are considering job cuts more often.

What has been a resilient labor market is beginning to feel the impact of economic weakness. Unemployment is seen rising this year to 6.0 percent from 5.7 percent in 2023, a level not expected to be reached again until 2026, according to forecasts by leading economic institutes released on Thursday.