Germany faces unemployment crisis – official data
Prospects for finding a job in Germany have fallen to their lowest level on record, according to the head of the Federal Employment Agency, Andrea Nahles.
Speaking to DW News on Friday, Nahles said the job placement indicator, which normally stands at around seven points, has fallen to 5.7, calling it “the lowest ever.”
She described the labor market as having been “like a plank for months,” with “no momentum coming in.” Nahles added that prospects are particularly weak for new job market entrants, adding that even well-qualified workers are no longer fully shielded from job losses.
“We have placed as few young people into apprenticeships as at any time in the past 25 years,” the official said.
Her remarks come amid the economic downturn that followed Berlin’s decision to halt imports of low-cost Russian energy, which had been vital for German industry. European gas prices surged after Russian pipeline deliveries largely stopped and the Nord Stream pipelines were sabotaged.
Business bankruptcies rose to an 11-year high during the first three quarters of the year, contributing to rising job losses. The Halle Institute for Economic Research (IWH) estimates that around 170,000 positions have been affected in 2025, up from fewer than 100,000 before the COVID-19 pandemic.
Unemployment surpassed the three million mark in August, and more than 100,000 more people entered the job market in November than in the same period last year.
According to the German Economic Institute (IW), the economy has entered a state of “shock” due to weak foreign demand, high interest rates, and a prolonged energy crisis. After an initial forecast of contraction, GDP is now expected to post modest growth of just 0.2%, with only 0.9% predicted for 2026.
In mid-December, the government approved reforms to unemployment benefits, replacing the existing system after three years with a new basic income framework. The changes introduce stricter requirements and tougher sanctions for recipients, with the stated aim of accelerating job placement.
