Germany's unemployment rate increased to 6.4% in January 2025, with nearly three million unemployed, reflecting significant economic challenges, the highest figure since January 2015. Seasonal employment trends typically cause spikes in January as contracts end and weather impacts work. Employers attribute rising unemployment to broader economic weaknesses, emphasizing the need for structural reforms and reduced costs. The mechanical engineering sector anticipates job cuts as a precaution in the next six months. Experts call for immediate action to reverse this trend and encourage economic growth post-elections.
"The labor market figures are an alarm signal," said Rainer Dulger, president of Germany's Confederation of German Employers' Associations. "The economic and structural weakness of the German economy is hitting the labor market with full force. It is five minutes to twelve."
"Then Germany will be back on a growth path. Only then will the turnaround in the labor market be successful," Rainer Dulger added, emphasizing the need for systemic reforms.
"One in four companies in the mechanical engineering sector is planning to cut jobs in the next six months, as our economic survey shows," expressed VDMA managing executive Thilo.
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