Germany’s labor market is flashing deeper warning signals than the latest business-sentiment improvement suggests. The Ifo Employment Barometer dropped to 92.3 points in the latest reading, a decline of 1.6 points that leaves the index at levels last seen during the Corona pandemic. While the broader Ifo Business Climate index recently stabilized, employer hiring and retention plans are deteriorating sharply.
The pain is distributed unevenly. In manufacturing and retail, the balance of firms planning cuts over additions stands at minus 18 percentage points. The service sector also shows a net negative balance of 4.9 percentage points, according to Ifo data.
A separate DIHK business survey from early summer paints…