Labour market in July 2023

Weak economy leaves its mark

01 Aug 2023 | Press release no.37

“With the beginning of the summer break, unemployment and underemployment rose in July. Employment is rising, but growth is rapidly losing momentum. Companies’ demand for labour remains cautious”, said Andrea Nahles, Chairwoman of the Federal Employment Agency (BA), today at the monthly press conference in Nuremberg.

Number of unemployed in July:
+62,000 to 2,617,000
Number of unemployed compared with the previous year:
Unemployment rate compared with the previous month:
+0.2 percentage points to 5.7 percent

Unemployment, underemployment and economic inactivity

Seasonally adjusted, the number of unemployed decreased by 4,000 in July 2023 compared to the previous month. Were Ukrainian nationals to have been excluded from the statistics, however, increases would have been observed as a result of the weak economy. Without seasonal adjustment, unemployment rose – as is usual with the start of the summer break – by 62,000 to 2,617,000. Compared to July last year, the number of unemployed is 147,000 higher. The unemployment rate rose by 0.2 percentage points to 5.7% in July 2023. Compared with the same month in the previous year, the rate increased by 0.3 percentage points. In June, the unemployment rate determined by the Federal Statistical Office according to the ILO concept of employment came to 3.1 percent.
Underemployment, which in addition to unemployment also includes changes in labour market policies and short-term incapacity to work, fell by 2,000 compared to the previous month in seasonally adjusted terms. In July 2023, it stood at 3,450,000 people. That is 239,000 more than a year ago. Without the taking into account of Ukrainian refugees, under-employment would have been only 88,000 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, from 1st to 26th July inclusive, notification of cyclical short-time work was given for 35,000 people. 
Up-to-date data on actual uptake is available up to May 2023. According to preliminary projected data from the Federal Employment Agency, cyclical short-time allowance was paid for 131,000 employees in this month, after 139,000 in April and 160,000 in March.

Economic activity and employment

According to the Federal Statistical Office, the number of economically active people (according to the domestic concept) remained unchanged in June 2023 against the previous month in seasonally adjusted terms. At 45.94 million people, it was 313,000 higher than in the previous year. Seasonally adjusted, employment subject to social security contributions increased only slightly from April to May 2023. Compared with the previous year, it rose in May by 253,000 to 34.70 million employees, according to BA projections. The increase in employment subject to social security contributions is solely due to foreigners. 7.54 million people were in low-paid “mini-job” employment in May 2023, 227,000 more than in the same month last year. Of this total, for 4.22 million people, this low-paid employment was their only job, and for 3.32 million it was just a side job. 

The demand for labour

In July, 772,000 job vacancies were registered with the BA, 108,000 fewer than a year ago. The reported demand for new staff remains subdued, although the number of registered vacancies is still at a comparatively high level. The BA Jobs Index (BA X) – an indicator of demand for staff in Germany, which also takes into account the number of new job vacancies as well as those already registered – remained unchanged in July 2023 at 119 points. The seasonally adjusted decline in reported demand has thus ceased for the time being. Compared to the same month last year, the BA-X recorded a decline of 15 points. 

Cash benefits for unemployment and persons requiring support

810,000 people received unemployment benefits in July 2023, 93,000 more than a year ago. In July, the number of persons able to work and entitled to the basic support for jobseekers (SGB II) was 3,944,000. Compared to July 2022, this was an increase of 114,000 people. 7.3 percent of people of working age living in Germany were therefore in need of support.