The Labour Market in January 2021

Robust Development Despite Lockdown

29 Jan 2021 | Press release no.5

“All in all, the labour market continued to be in robust shape in January. However, the measures taken to contain the Corona pandemic are leaving their mark,” said Detlef Scheele, Chairman of the Executive Board of the Federal Employment Agency (BA), at the monthly press conference in Nuremberg today.

Unemployment rate in January:
+193,000 – now 2,901,000

Unemployed persons compared to last year:

Unemployment rate compared to last month:
+0.4 percentage points to 6.3

Unemployment and underemployment

In the wake of the winter break, unemployment rose significantly from December to January. At 2,901,000, the number of unemployed is 193,000 higher than in the previous month. Seasonally adjusted, it has decreased. The unemployment rate rose by 0.4 percentage points in January to 6.3 percent. Compared to January of last year, the number of unemployed has increased by 475,000. The unemployment rate recorded an increase of one percentage point compared to the previous year. The unemployment rate determined according to the ILO employment concept by the Federal Statistical Office was 4.4 percent in December.

Underemployment, which also takes into account changes in labour market policy and short-term incapacity to work, was 3,679,000 in January 2021. That is 354,000 more than a year ago.

Short-time work

Before receiving short-time working allowance for their employees, companies have to report the expected reduction in their working hours. According to current data on verified reports, 745,000 persons were notified of cyclical short-time work from January 1 to 25. The higher level of reports since November is due to the renewed containment measures as a result of the increasing numbers of infections.

Current data on actual take-up will be available by November. According to preliminary extrapolated data from the Federal Employment Agency, cyclical short-time allowances were paid to 2.26 million workers in November. The take-up of short-time allowance had gradually declined after the previous peak in April with just under 6 million, but rose again in November with the renewed containment measures.

Gainful employment and employment subject to national insurance payments

With the economic restrictions in the wake of the Corona crisis, labour force participation and employment had decreased significantly, but recently they stabilised at the lower level. According to the Federal Statistical Office, the number of employed persons (according to the domestic concept) rose by 10,000 in December compared to the previous month, seasonally adjusted. At 44.68 million persons, it was 756,000 lower than in the previous year. Employment subject to social security contributions, whose data only extend to November, increased by 57,000 in this month, seasonally adjusted. Compared to the previous year, employment subject to social security contributions fell in November by 74,000 to 33.89 million employees, according to BA projections.

Labour demand

In January, 566,000 jobs were registered with the BA, 102,000 fewer than a year ago. If these figures are adjusted to account for seasonal factors, the amount of jobs registered with the BA has increased by 1,000. Der BA-Stellenindex (BA X) – an indicator of demand for staff in Germany – fell by one point to 98 points in January 2021. This is 19 points below the figure for the previous year.

Cash benefits

1,179,000 people received unemployment benefits in January 2021, 294,000 more than a year ago. The number of employable benefit claimants in the Basic Security for Jobseekers (SGB II) was 3,819,000 in January. Compared to January 2020, this was an increase of 65,000 people. This means that 7.0 percent of people of working age living in Germany were in need of assistance.

Training market

In the post-placement period on the training market for an immediate start to training, there were 77,000 young people looking for training between October and January, which was about 12,000 more than last year due to Corona. This contrasted with 73,000 registered company-based training places, 8,000 more than in the previous year. 33,000 applicants, or just under half, were still unplaced in January and another 23,000 were still looking for a training place despite having an alternative. At the same time, just under 12,000 training places were still unfilled. At the end of the post-placement period, 14,000 applicants were in vocational training.

For the new reporting year 2020/21, 11 percent fewer applicants have been registered so far than in January of the previous year due to the pandemic-related restrictions. The number of training places is 8 percent below the previous year’s figure.