Responding to a question on her plans for the rest of the parliamentary term, Merkel told news magazine Focus that she wanted to work to achieve "the goal of 'work for everyone,' little by little."
Germany's labour market has defied economists' predictions of late, with the number of unemployed dropping past the symbolic three million level in September. The last time the number remained below three million for any length of time was in 1992, a couple of years after the country was reunified.
Despite economists' forecasts that the jobless rate would rise, Berlin now expects an average of 2.9 million unemployed workers in 2011, compared with 3.2 million for 2010.
In her interview with Focus Merkel noted that more than 2 million people who are able to work receive long-term unemployment benefits.
"We must and we can help them back to work," she said.
Citing what Hartz IV unemployment payments cost the German government – approximately €40 billion – the chancellor said at least part of those resources should be directed toward education, research and infrastructure.
"And we can achieve that, too, by bringing more long-term unemployed back into working life," she said. To facilitate those efforts, Merkel said her government would focus on helping problem groups – from single parents to the elderly, as well as young people with immigrant backgrounds.
Merkel also returned to the issue of tax cuts. Earlier this week, the chancellor claimed the need to consolidate Germany's budget meant there would be no tax relief in the near future.
"2010 is going much better than feared. But by year's end, we'll still have €50 billion in new debt," the chancellor told Focus, adding that tax revenue would be €5 billion less in 2012 compared to four years earlier.
Though Germany has weathered the worst of the financial crisis, Merkel said the global economy was still plagued by instability, with serious problems persisting in the United States and parts of the European Union.