Germany's labor market has started to show signs of being hurt by the economic slowdown that is fueled mainly by external factors, and the weaker momentum is reflecting in household spending, suggesting that the domestic resilience in the biggest euro area economy is weakening. Unemployment grew less-than-expected in July in seasonally adjusted terms, preliminary data from the Federal Employment Agency showed on Wednesday.
The seasonally adjusted unemployment grew by 1,000 persons to 2.283 million in July. Economists had forecast an increase of 2,000. The initially reported decline of 1,000 in June was revised to show no change. The seasonally adjusted jobless rate was 5 percent for a third straight month, in line with economists' expectations. However, in non-adjusted terms, the unemployment climbed by 59,218 persons to 2.275 million and the jobless rate climbed to 5 percent from 4.9 percent. The increase was the biggest since the start of the year and the jobless total the largest since March. Underemployment was largely unchanged from the previous month in seasonally adjusted terms, and totaled 3.201 million. On an unadjusted basis, the figure rose by 33,000 from the previous month. "Unemployment and underemployment increased in July, mainly due to the onset of the summer break," Daniel Terzenbach, an official at the Federal Employment Agency said. "The demand from companies for new employees is decreasing slightly and employment is continuing to increase, but less dynamically."
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.