2024.01.3111:49:00UTC+00German Unemployment Logs Unexpected Fall Despite Economic Woes

Joblessness in Germany registered an unexpected decrease in January as the labor market remained strong despite the economy moving closer to a recession.

The number of people out of work decreased by 2,000, offsetting the increase of 2,000 in December, the Federal Labor Agency said Wednesday.

Economists had forecast unemployment to increase sharply by 11,000.

The jobless rate held steady at 5.8 percent in January. The rate was forecast to remain unchanged at December's initially estimated rate of 5.9 percent.

Federal Employment Agency Chief Andrea Nahles said the labor market is stable despite the ongoing economic weakness.

According to the labor force survey, there were 1.37 million unemployed in December, Destatis reported earlier on Wednesday.

This was an increase of 5,000 from the prior month. The jobless rate remained unchanged at adjusted 3.1 percent.

Separately, the statistical office said that retail sales decreased 1.6 percent in real terms in December, confounding expectations for an increase of 0.7 percent.

Compared to December 2022, the retail turnover was down 1.7 percent. In 2023, the real retail turnover declined 3.3 percent after falling 0.7 percent in 2022. Sales were still 1.3 percent above the pre-pandemic level in 2019.

Another data from Destatis showed that import prices continued their declining trend at the end of the year amid lower energy costs.

Import prices were down 8.5 percent year-over-year in December, slightly slower than the 9.0 percent slump seen a month ago. Prices have been falling since March 2023.

Destatis said the decline was primarily due to a base effect originating from the high price increases in 2022. Import prices slid 8.3 percent in 2023, marking the biggest fall since 2009.