Economic recovery in Germany is only slowly reaching the labor market

The economic recovery in Germany is only slowly reaching the labor market. The employment barometer rose slightly in September to 95.1 points from 94.8 points in August, as the Munich Ifo Institute announced on Monday in its survey of thousands of companies from industry, services, trade and construction.

“The labor market is stabilizing, but a real recovery is not yet in sight,” said Ifo survey director Klaus Wohlrabe. “Jobs continue to be cut in industry and trade.”

“The recovery on the labor market is delayed,” write the institutes in their joint diagnosis for the federal government. Employment will initially continue to fall, while the unemployment rate is expected to fall from 6.4 percent in the current year to 6.2 percent next year and 5.8 percent in 2028.

Ifo business climate at its highest level in over three years

The mood in the German economy also improved in September despite high energy prices. The Ifo business climate rose by 1.1 points to 89.9 points. The most important German economic barometer is pointing upwards for the fifth month in a row and has reached its highest level in more than three years.

The Ifo business climate was better than analysts expected. On average, they had assumed an increase to 89.0 points. “The German economy is continuing its recovery,” said Ifo President Clemens Fuest, commenting on the results of the monthly survey of 9,000 companies.

The indicator was supported by increased expectations for future business and a better assessment of the current situation. However, according to the announcement, the automotive industry continues to move “in difficult territory”.