Germany’s seasonally adjusted unemployment total rose by 12,000 in September, twelve times the 1,000 increase forecast in a Reuters poll, as the country’s customary autumn labor-market improvement began weakly. The adjusted number of unemployed people reached 3.01 million, while the jobless rate remained at 6.4%, matching both the August rate and market expectations. The figures point to softer employment conditions even as other indicators have suggested the wider economy is recovering.
The unadjusted picture was somewhat better because the headline number fell below 3 million after remaining above that threshold for two consecutive months. Welt reported that the unadjusted total declined by 67,000 from August to 2.994 million, although it was still 40,000 higher than in September 2025. The unadjusted unemployment rate fell by 0.1 percentage point from August to 6.4%, leaving it 0.1 point above its year-earlier level.
The Federal Employment Agency said the seasonal pickup that normally begins in September was sluggish. Agency head Andrea Nahles said the improvement in the economy had not yet reached the labor market. Demand for workers showed only a limited increase: employers reported 660,000 vacancies, 30,000 more than a year earlier, according to Welt. Seasonally adjusted underemployment stood at 3.615 million and was slightly above its year-earlier level.
The benefit data also showed mixed conditions beneath the headline rate. Welt reported that 1.082 million people received unemployment insurance benefits, 85,000 more than a year earlier. The number receiving basic income support fell by 145,000 to 3.704 million. Regional differences remained wide, with unemployment rates of 11.2% in Bremen and 10.4% in Berlin, compared with 4.2% in Bavaria and 4.7% in Baden-Württemberg.
The weak September employment result contrasts with more optimistic forecasts for German output. The IMK economic institute recently raised its 2026 growth projection to 1.3% from 0.6%, citing stronger exports and increased public spending on defence and infrastructure. It forecast 1.4% growth in 2027 but cautioned that the recovery was not yet self-sustaining because high energy prices and policy uncertainty were weighing on household consumption. IMK expects the unemployment rate to average 6.4% in both 2026 and 2027.
What it means for traders: EUR/USD and euro-area rate expectations may react to whether Germany’s employment weakness persists alongside rising inflation. A continued increase in unemployment would signal that the recovery is not generating enough labor demand, while stronger hiring or a decline in the adjusted jobless total would support the more positive growth forecasts. The European Central Bank must also assess labor softness against inflation pressures, including German state data pointing to higher September prices. Traders will next watch Germany’s national CPI, factory orders, industrial production and subsequent employment reports for evidence that economic growth is reaching businesses and workers.