UPDATE 2-German jobless numbers hit 12-year high, economy posts steady growth

The labour office said that ⁠on that basis the number of people out of work was unchanged from December at 2.976 million and that the seasonally adjusted jobless rate was unchanged at 6.3%.

The number of unemployed people in Germany has hit a 12-year high, passing the 3 million mark this month, even after Europe's biggest economy brushed off trade turmoil and ⁠expanded faster than expected last quarter. Chancellor Friedrich Merz has promised to revive the economy after two years of mild contraction, pledging a sharp increase in infrastructure and defence spending. While the economy as a whole is showing signs of resilience, Merz's measures are taking longer than expected to translate into better conditions ​on the ground.

Labour office figures on Friday highlighted the lag in the jobs market from the economic stagnation of the last few years, with ‍177,000 more people out of work than in December, bringing the total to 3.08 million. The unemployment rate jumped by 0.4 percentage points to 6.6% in seasonally unadjusted terms. "There is currently little momentum in the labour market," said labour office director Andrea Nahles. "At the start of the year, unemployment rose markedly for seasonal reasons." The picture was only slightly brighter when ⁠accounting for seasonal ‌trends. The labour office said that ⁠on that basis the number of people out of work was unchanged from December at 2.976 million and that the seasonally adjusted jobless rate was unchanged at 6.3%. Analysts and ‍economists in a Reuters poll had predicted a seasonally adjusted rise of 4,000 in the jobless number.

ECONOMY RESILIENT IN FACE OF TRADE TURMOIL On a brighter note, German gross ​domestic product grew by 0.3% in the fourth quarter compared with the previous three months, beating the consensus forecast of 0.2%. On an ⁠annual basis, the statistics office confirmed its first estimate of 0.2% growth. "The German economy thus ended 2025 in positive territory after a turbulent year, particularly for foreign trade," the statistics office said. Economy ⁠Minister Katherina Reiche said on Friday the country must pivot toward new "growth engines", arguing that traditional export strengths "no longer carry our growth". Europe's biggest economy lowered its growth forecasts for this and next year on Wednesday.

INFLATION UP IN FIVE STATES Annual inflation rose in January in five German states, preliminary data ⁠showed on Friday, suggesting the nationwide rate - due out later in the day - has also risen this month.

Price growth of 2.0% to 2.3% ⁠was recorded in North Rhine-Westphalia, Baden-Wuerttemberg, Bavaria, ‌Saxony and Lower Saxony, and economists polled by Reuters forecast a harmonised national rate of 2.0% for January, unchanged from last month's rate. Euro zone annual inflation, due out next Wednesday, is expected at 1.7% for January, down from ⁠1.9% in December, according to economists polled by Reuters. (Additional reporting by Friederike Heine and Miranda Murray; editing ‍by Mark Heinrich and Hugh Lawson)

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