October 24, 2013
New data on Spanish unemployment are out today. The headline figures look, once again, rather encouraging. The overall unemployment rate has fallen below 26% in the third quarter of the year, and there are 39,500 employed people more than in the previous quarter.
The number of unemployed people has gone down by 72,800 – which is the largest decrease in a third quarter since 2005.
However, a few points are worth making:
- The rise in the number of employed people is due to an increase in self-employed and temporary workers. The number of employees on permanent contracts has actually fallen by 146,300. One can see the glass half-full or half-empty here. This finding can mean that the Spanish labour market is becoming more flexible, or just that the increase in the number of employed people is driven by seasonal workers – especially in the tourism sector.
- Employment is growing in the services sector, but is decreasing in agriculture, industry and construction. Another sign that the improvement in Q3 figures could be tourism-driven. This is not, in itself, a bad thing – given tourism is definitely one of Spain’s key resources and it is obvious that the Spanish economy needs to rebalance (away from construction). But it can’t quite be seen as a permanent source of growth, since the flow of tourists is per definition dependent on which season of the year you’re in.
- As we noted on this blog when the figures for Q2 came out, the number of active Spaniards (those working or actively searching for work) continues to go down – marking a further 33,300 decrease.
- Seasonally adjusted data show that the unemployment rate has actually increased by 0.21% from the previous quarter, and that the level of employment has not stopped going down since Q2 2008.