May sees German unemployment figures outperform analyst expectations

In May, the number of unemployed in Germany exceeded the expectations of Reuters-polled analysts, putting pressure on the new government as it attempts to steer the country's economy out of a prolonged downturn.

According to the news agency, the number of people out of work in the Republic increased by 34,000 in seasonally adjusted terms to 2.96 million. Reuters-surveyed analysts had anticipated a surge of just 10,000.

Germany's unemployment count has approached the 3 million mark for the first time in a decade.

As the agency notes, the economic downturn is negatively impacting the country's labor market amid persistent workforce shortages. This increases pressure on German Chancellor Friedrich Merz, who has pledged to do everything possible to stabilize the situation.

The American administration's import tariffs on European goods could also severely undermine the new German government's attempts to boost economic growth. Reuters strategists believe the trade conflict between the EU and the US may lead to another recession.

Pantheon Macroeconomics forecasts that Germany's unemployment rate will rise close to 6.5% in the next few months.