Germany expected to exceed benchmark 3 million unemployed

Experts anticipate that the number of unemployed in Germany will surpass 3 million in the coming months, despite slight upward trends in the labour market.

"The labour market is stabilizing somewhat. Nevertheless, unemployment will probably temporarily exceed the 3-million mark in the summer," economist Enzo Weber from the Institute for Employment Research (IAB) in Nuremberg said on Thursday, as the IAB released its latest labour market barometer.

In May, 2.919 million people were registered as unemployed in Germany. The Federal Employment Agency is set to release its June statistics on July 1.

The IAB labour market barometer rose for the third consecutive time in June. The institute's leading indicator increased by 0.2 points compared to the previous month, reaching 99.1 points.

Despite this increase, the value remains below the neutral mark of 100 points, indicating a still subdued development of the German labour market. The barometer reflects the assessments of all German employment agencies for the next three months.

"The labour market barometer is struggling to climb out of the valley it had slipped into by March," Weber said.

In particular, the component that predicts unemployment remains significantly in the negative range at 97.8 points, despite a slight increase of 0.3 points compared to the previous month - suggesting that unemployment figures are unlikely to improve significantly in the coming months.

In contrast, the employment component is developing more positively. It rose by 0.2 points in June to 100.4 points, signalling a slightly positive trend in the labour market.

However, Weber emphasized that this development only represents a slight stabilization. "The labour market is recovering slowly from previous setbacks, and larger leaps are not to be expected in the short term."