BERLIN, Jan. 7 (Xinhua) -- Germany's annual average number of unemployed rose by 161,000 to 2.95 million in 2025, official data showed on Wednesday, underscoring the toll of prolonged economic weakness on the country's labor market.
The jobless rate climbed by 0.3 percentage points to 6.3 percent, marking the third consecutive annual increase, the Federal Employment Agency (BA) said. That compares with 5.3 percent in 2022.
"The labor market gradually developed in an unfavourable direction in 2025 and, overall, was weaker than the year before," BA head Andrea Nahles said in a statement.
Against the backdrop of a sluggish economy, both unemployment and underemployment rose noticeably last year. The agency said demand for new staff was too weak to absorb a growing labor supply, while skills mismatches continued to hamper re-employment.
Hiring appetite among German businesses remained subdued. Newly registered vacancies fell to 1.46 million in 2025, hitting the lowest level in 25 years. Companies also relied heavily on short-time working to cushion the downturn, with around 300,000 workers on reduced hours, a level that remained elevated.
"The gradual worsening of the labor market is likely to continue into 2026," said Carsten Brzeski, global head of macro at ING. He cited an economy that has effectively stagnated for more than five years and mounting pressure on the country's industrial core.
Analysts say employment pressure is most acute in manufacturing. Data from Germany's Federal Statistical Office showed that by the end of the third quarter of 2025, industrial employment had shrunk by more than 120,000 year-on-year to 5.43 million amid widespread layoffs.
The automotive sector, the second-largest industrial employer after mechanical engineering, recorded the sharpest decline, shedding approximately 49,000 jobs during the period and pushing employment to its lowest level since early 2011. ■
