Germany: Sharp rise in sales in May despite weak jobs market

Research evidence excerpt

Germany: Sharp rise in sales in May despite weak jobs market

J P M O R G A N Europe Economic Research

30 June 2026

Germany: Sharp rise in sales in

May despite weak jobs market

Earlier today, two key releases provided fresh insight into German consumers’ Economic and Policy Research

performance through 2Q. While the employed population continues to shrink and Mariana Monteiro

energy prices remain elevated overall despite government measures to curb the (44 20) 3493-5147

rise, spending appears to be holding up. At the same time, household sentiment mariana.reispaivamonteiro@jpmorgan.com

remains low but has begun to improve. Taken together, the data point to resilience, J.P. Morgan Securities plc

though consumption is still likely to expand only modestly in 2Q.

Employment continues to contract, but the unemployment rate remained

stable at 6.3%: Despite the government’s efforts to inject momentum into the

economy, labour demand remains soft. The latest employment data showed that the

number of Germans in work fell by a further 8,000 in May, although the pace of

job losses appears to have moderated from the roughly 20,000 monthly declines

seen in 1Q. The decline in employment likely continues to be partly offset by

retirements. After edging up to 6.4% in April, the national unemployment rate has

since stabilized at 6.3% in May and again in June, with the number of unemployed

down 3,000 this month. Looking ahead, conditions are likely to remain soft in the

near term, but there are tentative signs of stabilization: vacancies ticked up in June,

and the latest PMI suggests employment, while still contracting, is doing so at a

more modest pace. One silver lining is that productivity has improved.

Retail sales rebounded in May, supported by the government’s fuel duty