German Employment Slips to 45.48 Million as Import Prices Climb 6.8 Percent in July
Germany’s labour market cooled further in July 2026 even as the cost of goods bought from abroad accelerated, according to two releases published the same day by the Federal Statistical Office, Destatis. Roughly 45.48 million persons resident in Germany were in employment in July, a seasonally adjusted decline of 13,000 from June, while import prices rose 6.8 percent year on year, up from 6.1 percent in June and matching the 6.8 percent pace recorded in May.
Employment Edges Down, Unemployment Rate Rises
The seasonally adjusted number of persons in employment fell by 13,000 in July compared with June, following an average monthly decline of 19,000 across January to June 2026, Destatis said. Without seasonal adjustment, employment was down 60,000, or 0.1 percent, from June, broadly in line with the average July decline of 52,000 recorded over 2023 to 2025.
Compared with July 2025, employment fell by 223,000, or 0.5 percent, extending a year on year downward trend that has persisted since January 2025. The pace of that annual decline has been stable in recent months: it stood at 0.4 percent in the months from January to April 2026 before widening to 0.5 percent in May, June and now July.
Separate labour force survey results showed 1.84 million people were unemployed in July, up 149,000, or 8.8 percent, from July 2025, taking the unemployment rate to 4.2 percent from 3.9 percent a year earlier. On a seasonally adjusted basis, unemployment rose to 1.74 million, an increase of 11,000, or 0.6 percent, on June, while the seasonally adjusted unemployment rate held steady at 4.0 percent for a second month.
Import Prices Reaccelerate on Energy and Metals
Import prices rose 0.2 percent in July compared with June, taking the year on year rate to 6.8 percent, the release said. Export prices rose 4.2 percent year on year, the largest annual increase since February 2023, and were up 0.4 percent on the month.
The year on year increase was driven chiefly by intermediate goods, up 10.2 percent from July 2025, and energy, up 26.4 percent. Within intermediate goods, non ferrous metals and semi finished metal products rose 26.0 percent year on year, with copper and semi finished copper products up 33.0 percent, precious metals up 25.1 percent and aluminium and semi finished aluminium products up 20.4 percent.
The sustained year on year pressure on energy was attributed to the war in the Middle East, with increases versus July 2025 in mineral oil products of 47.5 percent, crude oil of 22.3 percent, electricity of 19.7 percent, natural gas of 18.8 percent and hard coal of 17.5 percent. Within mineral oil products, lubricating oils and other oils rose 99.0 percent, kerosene based aviation turbine fuel 62.6 percent, diesel fuel and heating oil 52.4 percent, and petrol 50.3 percent, all year on year.
Stripping out energy, import prices were up 4.8 percent year on year; excluding crude oil and mineral oil products as well, the index stood 5.4 percent above its July 2025 level. Imported agricultural products were 2.1 percent cheaper than a year earlier, with live pigs down 35.9 percent and raw cocoa down 32.6 percent year on year, while imported consumer goods were down 0.2 percent year on year as food prices fell 6.8 percent.
| Measure | July 2026 | June 2026 | May 2026 |
|---|---|---|---|
| Import prices, year on year | 6.8% | 6.1% | 6.8% |
| Export prices, year on year | 4.2% | 3.5% | 3.4% |
| Employment, year on year | -0.5% | -0.5% | -0.5% |
Why it matters: The two releases together describe an economy where the labour market is losing a small amount of ground each month while the cost of imported inputs, particularly energy and metals, remains elevated after a temporary easing in June. On our reading, a workforce that is shrinking year on year alongside import prices that reaccelerated to 6.8 percent in July represents a mild squeeze for German firms: input costs for energy intensive and metals dependent manufacturers are climbing again just as the domestic labour base contracts, a combination that tends to weigh on margins before it shows up in headline growth figures. The unemployment rate move, from 3.9 percent to 4.2 percent year on year, is a further sign that the labour market’s earlier resilience is fading gradually rather than sharply. On our calculation, the three month path of import price inflation, 6.8 percent in May, 6.1 percent in June and 6.8 percent again in July, is not a clean upward trend but rather a plateau with one softer month in between, and the 4.8 percent ex energy reading shows that energy materially amplified the headline rate, while underlying non energy import price pressure also remained substantial. Germany’s economy grew 0.3 percent quarter on quarter in the second quarter of 2026, according to detailed results separately published on 25 August, so on our reading, July’s flat to slightly negative employment reading sits awkwardly against that modest quarterly expansion: growth in the second quarter was not accompanied by hiring, and the labour market continued to contract into the third quarter even as output expanded.
Outlook: With energy and metals prices still the dominant drivers of the year on year import price rate, further moves in oil, gas and non ferrous metals markets will continue to determine whether the headline rate holds near 6.8 percent or drifts back toward the 6.1 percent recorded in June. On the labour market, the year on year decline in employment has now held at 0.5 percent for three consecutive months, May, June and July, while the seasonally adjusted unemployment rate has been unchanged at 4.0 percent for two months running, suggesting the pace of labour market softening, while persistent, is not currently accelerating.
Sources: Destatis
