Job market in August 2023

Weak economic situation intensifies the usual effects of the summer break

31 Aug 2023 | Press release no.41

“The summer break and the weak economic situation are leaving their mark on the job market. Nevertheless, the market continues to be in a solid basic condition,” says the chair of the executive board of the Federal Employment Agency (BA), Andrea Nahles, today on the occasion of the monthly press conference in Nuremberg.

Unemployment rate in August:
+79,000 to 2,696,000
Number of unemployed compared with the previous year:
Unemployment rate compared with the previous month:
+0.1 percentage points up 5.8 percent

Unemployment, underemployment and economic inactivity

Unemployment rose in August, as is usual in the summer break, by around 79,000 to 2,696,000. Compared to the August of the previous year, the number of unemployed persons is higher by around 148,000. The seasonally adjusted number of the unemployed persons increased in August 2023 in relation to the previous month by 18,000. This, then, continues the rise observed in the previous months due to the weak economic situation. The unemployment rate rose in August 2023 by around 0.1 percentage points to 5.8 percent. Compared with the same month in the previous year, the rate increased by 0.2 percentage points. The rate of unemployed persons determined by the Federal Statistical Office according to the ILO labour force concept amounted in July to 3.0 percent.

On a seasonally-adjusted basis, underemployment, which, in addition to unemployment, also includes changes in labour market policy and short-term incapacity to work, increased by 10,000 compared with the previous month. In August 2023, it amounted to 3,485,000 people. That is 207,000 more than a year ago. Without the taking into account of Ukrainian refugees, under-employment would have been only 94,000 higher than in the previous year.

Short-time work

Before the start of short-time work, companies are required to submit a notification of the expected loss of work. According to current data, short-time work relating to market conditions was reported for 28,000 people from 1 until and including 27 August.

The latest data on the actual take-up is available up to June 2023. According to preliminary extrapolated data from the Federal Employment Agency, cyclical short-time allowance was paid for 163,000 employees in this month, after 150,000 in May and 144,000 in April.

Economic activity and employment

According to the Federal Statistical Office, the seasonally adjusted number of economically active persons (according to the inland concept) in July 2023 increased by 15,000 compared with the previous month. At 45.92 million people, it was 339,000 higher than in the previous year. Seasonally adjusted rates of employment subject to social security contributions did not change from May to June 2023. According to projections by the BA, the number of employed persons rose in June compared to the previous year by 234,000 to 34.68 million, whereby the rise is due solely to foreign nationals. 7.58 million people were in low-paid “mini job” employment in June 2023, 220,000 more than in the previous year month. Of this total, for 4.25 million people, this low-paid employment was their only job, and for 3.33 million it was just a side job. 

The demand for labour

In August, 771,000 open vacancies were announced to the BA, 116,000 less than in the last year. The reported demand for new staff remains subdued, although the number of registered vacancies is still at a comparatively high level. The BA Job Index (BA X) – an indicator for the demand for personnel in Germany, which also takes into account the number of new job vacancies as well as those already registered – sank in August 2023 by around 2 to 117 points. This means that the reported demand continues to be in the downtrend, seasonally adjusted. Compared to the same month last year, the BA-X recorded a decline of 17 points. 

Cash benefits for unemployment and persons requiring support

823,000 people received unemployment benefit in August 2023, 86,000 more than last year. The number of persons capable of working and entitled to benefits in basic income for jobseekers (SGB II) in August was about 3,957,000. Compared to August 2022, this was a rise by around 110,000 people. 7.3 percent of people of working age living in Germany were therefore in need of support.

The market for vocational training and apprenticeships

In the period between October 2022 until August 2023, 408,000 applicants for an apprentice position registered with the federal employment agencies and the job centres. That corresponds to the level observed in the prior year. Of these applicant, 76,000had found neither an apprenticeship position nor another alternative in August. At the same time, 520,000 apprentice positions in companies were registered, about the same amount as one year ago. Of these, 177,000 were still vacant. The market for apprenticeships and vocational training remains dynamic in August. Therefore, number of the vacant apprentice positions and of the unplaced applicants will decrease significantly by the balance sheet date on 30/09/2023.