Germany’s unemployment rate declined in May, with the number of jobless individuals falling below three million for the first time in four months, according to official figures released Friday. The Federal Employment Agency (BA) reported a reduction of 58,000 unemployed workers from the previous month, bringing the total to 2.95 million. The unemployment rate decreased by 0.1 percentage point to 6.3 percent.

Despite the month-on-month improvement, Andrea Nahles, head of the BA, expressed caution about the outlook for the labor market. She noted that the expected spring recovery has yet to gain substantial traction, and a meaningful turnaround in employment conditions remains uncertain.

Year-on-year comparisons show that unemployment in Germany rose by 31,000, highlighting ongoing challenges in the country’s labor market despite the recent dip. The persistent weakness reflects a broader economic slowdown affecting Europe’s largest economy, which has experienced prolonged sluggish growth.

Additional data from the ifo Institute, released earlier in the week, indicated that while German companies are planning fewer job cuts than in previous months, their staffing strategies favor headcount reductions over new hiring. This trend suggests that employers remain cautious about expansion amid the uncertain economic environment.

The combination of modest labor market improvement and prevailing caution underscores the fragile state of Germany’s economy as it navigates slow growth and global economic pressures.