Germany’s labour market barometer stood at 104.1 in May, down by 0.4 points when compared to last year, according to the Institute for Employment Research.

The barometer stated that both the employment and unemployment outlook are dampening, however the barometer remains at a high level which shows good prospects for the labour market in the coming months.

"The employment agencies expect another, but subdued, reduction in unemployment," Enzo Weber, Head of the IAB Research Division, Forecasts and Macroeconomic Analysis, said.

The IAB Labor Market Barometer is an early indicator based on a monthly survey of the Federal Employment Agency among all local employment agencies. While component A of the barometer predicts the evolution of seasonally adjusted unemployment rates over the next three months, component B is predictive of employment development. The average of the components "unemployment" and "employment" is the total value of the IAB labor market barometer. This indicator gives an outlook on the overall development of the labor market.  The scale of the IAB labor market barometer ranges from 90 (“very bad development”) to 110 (“very good development”).

According to figures from Eurostat, the unemployment rate in Germany stood at 3.4% in March.