Economy February 27, 2026

German Unemployment Inches Up in February as Labour Market Remains Soft

Small rise in jobless numbers and steady unemployment rate underscore lingering economic weakness despite planned fiscal boosts

By Maya Rios
German Unemployment Inches Up in February as Labour Market Remains Soft

Germany recorded a marginal increase in the number of unemployed people in February, with seasonally adjusted figures rising by 1,000 to reach 2.977 million. The unemployment rate held steady at 6.3%. Analysts had anticipated a larger rise of about 2,000. Labour office chief Andrea Nahles said the labour market has yet to regain momentum, while Chancellor Friedrich Merz's pledged increases in infrastructure and defence spending have not produced a noticeable pick-up so far.

Key Points

  • Seasonally adjusted unemployment rose by 1,000 in February to 2.977 million, up from 2.976 million in January.
  • The jobless rate held steady at 6.3% month-on-month, in line with forecasts.
  • Labour office head Andrea Nahles said the labour market is still struggling to gain momentum; Chancellor Friedrich Merz's planned boost to infrastructure and defence spending has not yet delivered a discernible impact.

BERLIN, Feb 27 - Germany's jobless rolls climbed slightly in February, official labour office data showed, reflecting an ongoing drag on Europe's largest economy from the weakness seen over the past three years.

On a seasonally adjusted basis, the unemployment count rose by 1,000 to 2.977 million in February, up from 2.976 million in January. The pace of the increase was softer than the roughly 2,000 rise forecast by analysts and economists in pre-release polling.

The seasonally adjusted unemployment rate remained unchanged at 6.3% compared with the previous month, matching expectations.

"Even at the end of the winter break, the labour market is still struggling to gain momentum," Andrea Nahles, head of the labour office, said in a statement summarising the February figures.

Chancellor Friedrich Merz has committed to reversing the downturn by significantly increasing spending on infrastructure and defence. However, the labour office noted that the effects of those fiscal commitments have not yet materialised noticeably in the labour market.

The modest rise in the jobless total and the unchanged unemployment rate together paint a picture of a market that remains fragile: headline figures are not deteriorating sharply, but neither are they signalling a clear rebound in hiring activity.

For policymakers and market observers, the February release provides further evidence that short-term indicators of labour-market health are being held back by the broader economic weakness of recent years. The data leaves open the question of when higher public investment will translate into sustained upward momentum in employment.


Context and implications

While the month-to-month change in the absolute number of unemployed is small in numerical terms, the persistence of a relatively elevated unemployment rate implies continued slack in the labour market. The labour office commentary emphasises that seasonal factors have waned but that structural headwinds persist.

The data will be watched by officials and market participants for signs that planned fiscal measures - notably higher infrastructure and defence spending - are beginning to affect hiring, particularly in construction, public works and defence-related sectors. To date, the labour office assessment suggests any such pickup remains limited.

Risks

  • Persistent economic weakness over the past three years continues to weigh on the labour market - this risks prolonged softness in employment and consumption (impacts labour market broadly and domestic demand).
  • Delayed effect of planned fiscal measures - infrastructure and defence spending pledged by the government have not yet produced visible improvements in hiring, introducing uncertainty for sectors expecting stimulus such as construction and defence-related suppliers.

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