Germany's unemployment increased unexpectedly in March as companies failed to create more jobs, while retail sales increased in February for the second month reflecting the ongoing positive momentum in consumer spending.
The number of unemployed increased 13,000 from February to 2.94 million, the Federal Labor Agency said Thursday. It was forecast to fall by 2,000. The jobless figures for February were revised from a decline of 3,000 to show no change.
Nonetheless, the jobless rate remained near a post-unification low, at a seasonally adjusted 6.9 percent in March. It has been at 6.9 percent since October 2012 and matched economists' expectations.
The German labor market is relatively unaffected by the economic conditions of the last few months and continues to develop solid, Labor Office chief Frank-Juergen Weise said in a statement.
However, Jennifer McKeown senior European economist at Capital Economics said the March unemployment data brought more evidence that the impressive labor market recovery is petering out.
Earlier today, the Federal Statistical Office said that the unemployment rate, as per the International Labor Organization measure, stayed unchanged at 5.4 percent in February. The number of unemployed persons remained broadly unchanged at around 2.3 million.
Suggesting that consumer spending will help recovery, retail sales grew 0.4 percent in February, confounding expectations for a 0.6 percent fall, official data showed. From a year ago, sales fell 2.2 percent.
The GfK survey results published on Wednesday revealed that consumer confidence is set to remain unchanged in April. However, the firm said that the impact of the Cyprus financial crisis on the German household sentiment is yet to be measured.
In all, while a relatively robust labor market and the strong state of households' finances should allow German consumer spending to expand modestly this year, Capital Economics said those still waiting for a strong consumer revival are likely to be disappointed.
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April 24, 2026 15:15 ET Economics news flow was relatively light this week even as the conflict in the Middle East continued, raising concerns for policymakers. In the U.S., spending data, initial jobless claims and pending home sales were the highlights. Business confidence in the biggest euro area economy was in focus in Europe. Inflation data from Japan gained attention in Asia.