The German labor market is proving robust at the start of the New Year. Although the number of unemployed in January compared to the previous month of December rose sharply, as the Federal Employment Agency (BA) announced on Tuesday in Nuremberg: by 162,000 to 2.616 million. According to their information, however, it is a usual increase for this time of year, which is related, among other things, to the winter break in construction, catering and agriculture.

By contrast, factoring out typical seasonal fluctuations, unemployment fell for the second month in a row - and despite the energy crisis and high inflation: by 15,000. The unemployment rate rose by 0.3 percentage points to 5.7 percent.

"The labor market remained stable at the beginning of the year," said Andrea Nahles, chairwoman of the Federal Agency's executive board. However, she added, effects of geopolitical and economic uncertainties were "still discernible."

For example, underemployment, which in addition to unemployment also includes people who are ill for a short time or are participating in a labor market policy measure, rose by 3,000 to 3.455 million compared to the previous month, seasonally adjusted. The BA attributes this, among other things, to the fact that Ukrainian refugees are increasingly taking part in integration courses.

The number of employees on short-time work has also increased noticeably. In November - more recent data is not yet available - the figure was 208,000, up from 138,000 in October and 100,000 in September. In addition, demand from companies for new employees has continued to weaken slightly. In January, 764,000 jobs were registered with the BA, 27,000 fewer than a year ago.

The number of people in employment in December, meanwhile, seasonally adjusted to the previous month only slightly increased, as reported by the Federal Statistical Office in Wiesbaden on Tuesday: by 21,000 people or 0.0 percent to 45.7 million. In November, employment had still risen by 33,000 seasonally adjusted, an increase of 0.1 percent.

Not seasonally adjusted, the number of employed persons decreased significantly in December - as is usual at this time of year - by 125,000 or 0.3 percent. Previously, the number of employed persons had risen to a new high every month since September 2022. The decline in December 2022 was as sharp as the December average for the three pre-crisis years 2017 to 2019.

Image by Gerd Altmann