Germany's Unemployment Rate Remains Steady in December Despite Threat of Job Cuts

According to data released by the Federal Employment Agency on Friday, Germany's unemployment rate remained steady at 6.1% in December. This figure is slightly below the 6.2% anticipated by economists surveyed by The Wall Street Journal.

While the unemployment rate remained unchanged, signs of a possible slowdown in the labor market are evident. In December, the number of unemployment applications rose by 10,000 on a seasonally adjusted basis, a significant increase compared to the 6,000 reported in November.

Additionally, the number of registered job vacancies was around 654,000, indicating a decrease of about 59,000 compared to the same period last year.

Several major industrial companies, including Thyssenkrupp, Bosch, and Schaeffler, have recently announced or hinted at widespread job cuts. This situation arises as Europe's largest economy continues to grapple with production challenges.

Automaker Volkswagen reached an agreement with labor unions last month to avert urgent layoffs and factory closures in Germany. However, the company plans to reduce its workforce by 35,000 in the coming years.

Germany's unemployment rate has slightly increased from around 5% in 2022. The current rate aligns with levels observed at the beginning of 2021, when the economy was still trying to recover from the effects of the pandemic.