Germany, Europe's largest economy, is reportedly grappling with an economic slowdown that is now impacting its labor market.

Citing the latest data from the Federal Labour Office, Euronews reported that as of November, Germany's unemployment rate rose to 5.9%, an increase from October's 5.8%. The November figure is the highest rate since May 2021.

(Photo : INA FASSBENDER/AFP via Getty Images)
An employee works in a hall with coils of cold-rolled steel at the ThyssenKrupp plant in Duisburg, western Germany on November 16, 2021. - Shares in Thyssenkrupp rose at the Frankfurt Stock Exchange on November 16 after press reports about the possible IPO of a unit developing green hydrogen projects. ThyssenKrupp wants to find out, how coal can be replaced by hydrogen in the production of iron in their blast furnaces. Behind this is the "H2Stahl" project, the aim of which is to reduce CO2 emissions in steel production in the future by using hydrogen.

Labor Market's Economic Downturn in Germany

The report indicates that the number of unemployed individuals rose by 22,000 in seasonally adjusted terms to 2.702 million.

Analyzing regional data, Bremen and Berlin registered the highest unemployment rates, while Bayern and Baden-Württemberg maintained the lowest rates.

Andrea Nahles, chairwoman of the Federal Employment Agency, acknowledged the impact of the ongoing economic downturn on the German labor market. In November, Germany had 733,000 job openings, representing a decrease of 90,000 compared to the previous year.

Nahles explained that while employment was seeing slight growth, labor demand remained on a declining trajectory.

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Willingness of Companies in Germany to Hire New Staff

The Ifo Institute for Economic Research employment barometer for November revealed a slight dip in the willingness of German companies to hire new staff. 

Klaus Wohlrabe, head of surveys at Ifo, attributed this trend to the absence of a solid foundation for recovery, prompting companies to postpone hiring decisions.

Euronews reported that Germany's economic struggles are evident in the overall economy, and GDP contracted in this year's third quarter, showing signs of an impending recession.

The challenges facing the labor market reflect the broader economic headwinds that Germany is currently navigating.

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