Germany closed 2025 with a clear marker of strain in its labor market: the unadjusted number of people out of work rose to about 2.9 million in December, the Federal Employment Agency (Bundesagentur für Arbeit, BA) said — the weakest December showing since 2010.
The headline numbers are simple enough but tell a layered story. The unadjusted unemployment count increased by roughly 23,000 month-on-month to 2.9 million, nudging the jobless rate up to 6.2%. At the same time, vacancies fell sharply: roughly 35,000 fewer open positions than the year before, leaving about 619,000 unfilled roles.
Official BA data distinguish between raw month-to-month changes and seasonally adjusted figures; that partly explains why different outlets framed the news differently. Some seasonally adjusted measures showed smaller moves, prompting headlines about "holds steady," while the raw December tally — and the 2025 annual averages — underline a slower, longer-term deterioration.
A market showing wear, not a sudden collapse
Taken together, the numbers sketch a labor market that’s shifted from remarkably tight to merely functional. The BA’s annual averages rose as well: the average number of unemployed grew by about 161,000 in 2025 to roughly 2.95 million, and the average unemployment rate climbed to 6.3% from 6.0% in 2024. Economists point out that these are not the panic-inducing spikes of a deep recession, but they are meaningful: five years of stagnation in the broader economy and mounting structural pressures in industry have left fewer firms hiring aggressively.
Carsten Brzeski, head of global macro research at ING, described December as the worst since 2010 — a useful comparison because it frames the move as historically significant for the month, not merely a seasonal blip. Analysts also flagged that the shortfall between expectations and results mattered: markets had penciled in a much smaller rise in joblessness than actuals showed.
Jobs, vacancies and the shifting nature of work
Falling vacancies are one of the more consequential features of the report. When openings drop — and they did, by tens of thousands — it signals companies are trimming hiring plans or delaying growth, not simply replacing leavers. That has knock-on effects for the long-term unemployed and youth entrants to the market.
Some of that slowdown reflects winter seasonality and holiday hiring patterns. But a broader context looms: Germany’s industrial backbone is wrestling with structural change (energy transition, automation, global competition), and firms are increasingly cautious. The BA’s own thinktank, the IAB, warned that the coming months do not reveal a clear turnaround: conditions aren’t collapsing, but there isn’t enough momentum yet for sustained hiring growth.
Automation and AI are part of the conversation too. As companies rethink workflows, some industries are shifting resources away from headcount and toward technology and retraining. That dynamic is visible in sectors beyond manufacturing — firms across services and media are experimenting with automated QA and AI tools, which changes the mix of skills employers seek and the types of roles that remain open (AI debate on human-level intelligence and its implications; automation in white-collar QA work).
Policy and political pressure
The data arrive at a sensitive time politically. A softer labor market increases pressure on policymakers to act: retraining programs, incentives for hiring, or measures to stimulate demand could all be on the table. But Germany’s fiscal and industrial levers are constrained by competing priorities, and firms are cautious about expanding payrolls into a low-growth environment.
For households, the immediate effect will vary. Some households feel the squeeze through longer job searches or reduced wage bargaining power; others — in sectors still hiring — see little change. Businesses that depend on a steady flow of vacancies (construction, hospitality) will watch the first quarter especially closely.
This is not a single-day story. The December figures are the latest point on a trendline that unfolded across 2025: rising average unemployment, fewer vacancies, and a labor market that looks softer than the headline unemployment rate alone might suggest. Whether 2026 becomes a year of recovery or continued cooling will depend on growth returning to Germany’s economy, how quickly firms adapt to structural shifts, and what policy steps governments take to ease transitions for workers.
If you want to read the primary source, the BA’s site carries the full dataset and methodology notes. For now, businesses, unions and policymakers are absorbing a clear message: the era of easy hiring is over, and the next phase will be about adaptation — for firms and for the workforce alike.