Germany will be under considerable pressure in the third quarter of 2025. The decline in employment is shaping the situation and noticeably impacting the German labor market. Despite high hopes, no new impetus is emerging. The decline in employment in 2025 is more pronounced than before. The economic slowdown is affecting several sectors simultaneously, and the structural problems of the labor market are coming into sharper focus. This combination of pressures is visibly impacting the entire employment system. (destatis: 18.11.25)
Declining Employment Despite High Starting Figures
In the third quarter, the number of employed persons was around 46 million. Nevertheless, seasonally adjusted figures showed a decrease of 41,000. This further intensified the decline in employment. The previous quarter had already seen a negative result. While there was a minimal increase without adjustment, the typical seasonal boost was absent. This weak situation illustrates how strained the German labor market has become.
A year-on-year comparison also paints a bleak picture. Compared to the third quarter of 2024, employment shrank by 23,000 people. This decline in employment thus ends the positive trend of previous years. The strong post-pandemic surge is long gone, and the employment decline in 2025 now sends a clear warning signal. The economic slowdown is clearly evident in these figures.
Service Sector with Strong Contrasts
Within the service sector, a turbulent pattern is emerging. Some segments are growing, while others are noticeably experiencing a crisis. Public services, education, and healthcare continue to grow strongly. However, this growth only benefits certain areas. The decline in employment in other segments, such as information and communication, is problematic. A former engine of employment is losing momentum. Trade, transportation, and hospitality are also slipping into negative territory. This structural crisis reveals the depth of the labor market’s structural problems.
Manufacturing as a Crisis Hub
The manufacturing sector, excluding construction, is experiencing a particularly sharp decline. The number of employees is falling by 154,000. This development illustrates the economic slowdown more clearly than any other. The construction sector shows a similar pattern. Agriculture and forestry are also recording a slight decrease. The employment decline in 2025 is thus impacting precisely those sectors that are traditionally considered the backbone of the German economy.
Employees on the Rise, Self-Employment in Decline
The number of employees is rising slightly to around 42.3 million. This increase is primarily due to jobs subject to social security contributions. Marginal employment, on the other hand, is declining. At the same time, the number of self-employed individuals is shrinking. Around 30,000 people are giving up their business or switching to other forms of employment. The number is falling to 3.7 million. This trend is exacerbating the decline in employment, as important impetus from the entrepreneurial base is lacking. The German labor market development reveals a structural deficit here.
Declining Working Hours and Weak European Comparison
Average working hours per capita rose slightly to around 340.9 hours. However, this minimal increase is insufficient to offset the losses in employment. Working hours fell to 15.7 billion. At the same time, a significant deficit is evident in comparison to other European countries. Eurostat reports an increase in employment of 0.6% for the EU. The Eurozone saw an increase of 0.5%. Germany thus slipped below the European average. This shortfall underscores both the economic slowdown and the structural problems in the labor market.
Revised Data Confirms the Critical Development
An update of the national accounts confirms the negative trend. The underlying growth rates remain unchanged and support the analysis. Seasonally adjusted comparisons reveal the short-term dynamics, while the year-on-year comparison shows the deeper structural issues. Both perspectives paint the same picture: a clear decline in employment and a significant deterioration in Germany’s labor market.