Seasonally adjusted data showed the number of unemployed declined by 8,000 in March after increasing last month for the first time since June.
In raw numbers, the number of people seeking work reached 2.83 million, 77,000 fewer than in February but nearly 500,000 more than in March 2020 due to the impact of the virus.
“There was a noticeable rebound in the job market in March despite the rise in (Covid-19) infections and the ongoing restrictions in certain economic sectors,” agency president Detlef Scheele said in a statement.
The number of people on short-time work arrangements (Kurzarbeit) has climbed since a stricter shutdown came into effect in Europe’s top economy in November, hitting 2.85 million in January, the last month for which complete data was available.
In March, 197,000 employees joined the scheme, down from 500,000 in February.
Before the pandemic, Germany’s seasonally adjusted unemployment rate was steady at around five percent.
Germany partially reopened schools and some businesses at the beginning of March this year after a dip in new infections but the third wave is now hitting the country hard.