The German labor market demonstrated renewed positive momentum in August 2025, according to the latest data from the Institute for Employment Research (IAB). The IAB’s Labor Market Barometer rose to 100.7 points, a gain of 0.7 points, returning to positive territory.
However, the European labor market continues to show limited dynamism. The European Labour Market Barometer remained steady at 99.7 points in August.
The component of the German barometer predicting unemployment registered a notable increase of 0.9 points, reaching 100.5 points. This marks a cumulative increase of almost four points since March 2025.
“For the first time in over three years, employment agencies anticipate an end to the rise in unemployment” stated Enzo Weber, head of the IAB’s “Forecasts and Macroeconomic Analyses” research department. The employment component also climbed, increasing by 0.5 points to 100.9 points, indicating a more positive outlook. Weber noted that employment could begin to accelerate slightly after a recent slowdown, though the industrial sector remains under pressure.
The German labor market barometer has now outperformed European labor market expectations for two consecutive months. The European Labour Market Barometer has remained at 99.7 points for the fourth consecutive month, continuing to signal a mildly pessimistic outlook for Europe. “Without a significant economic upturn, European labor markets will continue to stagnate” Weber explained.
