German unemployment increased less than anticipated in December, indicating that the country’s labor market is showing surprising resilience despite the ongoing economic challenges. Joblessness rose by 10,000, according to the Federal Labor Agency, while economists polled by Bloomberg had predicted a larger increase of 15,000.
The unemployment rate remained steady at 6.1%, the agency said in a statement released on Friday.
These figures come as Chancellor Olaf Scholz is preparing for snap elections scheduled for February 23. The labor market has been a relative bright spot in an otherwise struggling economy, which contracted in both 2023 and 2024 and is forecast to grow by a meager 0.2% this year.
Scholz’s SPD (Social Democratic Party) is facing particular challenges in eastern Germany, where unemployment rates are typically higher than in the western states. The relative strength of the job market will be a key focus as he seeks to bolster support for his party before the upcoming election.
Despite the moderate increase in unemployment, German companies are facing significant challenges in attracting qualified personnel. A December report from the DIHK Chambers of Industry and Commerce revealed that around 43% of firms are struggling to fill vacancies due to an acute shortage of skilled labor.
