2023.03.0110:12:00UTC+00German Unemployment Remains Stable Despite Challenging Conditions

Germany's jobless rate remained stable in February underscoring the strength of the labor market despite strong signs of recession, official data showed Wednesday.

The unemployment rate held steady at 5.5 percent in February, the Federal Labor Agency reported. The rate also came in line with expectations.

The number of people out of work increased 2,000 in February, in contrast to the revised decrease of 11,000 in January. Unemployment was forecast to rise 9,000.

Overall, the job market has remained stable despite the tense economic situation, said Andrea Nahles, chairperson of the Federal Labor Agency, said.

Based on the labor force survey, Destatis said the number of unemployed decreased by 107,000 or 7.5 percent in January from the last year. The jobless rate fell to 3.0 percent from 3.3 percent in the previous year.

On a seasonally adjusted basis, unemployment totaled 1.32 million, down by 9,900 from December. The adjusted jobless rate remained unchanged at 3.0 percent in January.

Elsewhere on Wednesday, the Purchasing Managers' survey showed that Germany's manufacturing activity contracted the most in three months in February.

The S&P Global/BME final manufacturing PMI fell to 46.3 in February from 47.3 in January. The score was also below the flash estimate of 46.5.

Nonetheless, the survey showed a sustained rise in manufacturing workforce numbers in February. The rate of job creation picked up slightly, although it was still the second-weakest in the current sequence of growth stretching back to March 2021.

In the February monthly report, Bundesbank said Germany's economy is set to contract again in the first quarter of this year but there would be a gradual pick up going forward.

Last week, the statistical office revised the economic contraction for the fourth quarter to 0.4 percent from 0.2 percent, indicating that expectations of shallow recession was premature.