Spain: Unemployment edges higher in Q4
January 25, 2018
The jobless rate inched up to 16.6% in the fourth quarter of last year, from 16.4% a quarter before. Despite the small uptick, Q4’s figure still marked the second-lowest print in nine years and a notable improvement over the 18.6% log recorded in the same quarter a year ago. The unemployment rate, however, fell short of market expectations of a further decline to 16.2% in Q4. In absolute terms, the number of unemployed people rose to 3.77 million in Q4, slightly above 3.73 million in Q3.
Employment decreased in the services sector (-124,300) and in construction (-10,900) on the back of a seasonal decrease in temporary tourism-related jobs and colder weather. These decreases were partially offset by gains in the agricultural (+43,700) and industrial sectors (+40,700). In line with fewer jobs in the services sector, temporary jobs were down 118,800, while permanent positions went up by 102,900. Meanwhile, the workforce rose by 15,900 in Q4 to a total of 22.8 million.
The labor market is widely expected to continue improving this year as the Spanish economy benefits from strong global growth, favorable financing conditions and improved competitiveness abroad. In addition, strong employment growth will continue to boost consumers’ purchasing power, fueling another year of resilient growth in 2018. The effects of Catalonia’s push for independence are difficult to discern in the labor report, since employment in the region was also likely affected by the August terrorist attacks. Nonetheless, and despite a very limited short-term impact, political noise is likely weighing on investment in the region, reducing its capacity for long-term growth.
Spain Unemployment Forecast
FocusEconomics Consensus Forecast participants expect unemployment to average 15.6% next year, which is unchanged from last month’s projection. For 2019, the panel foresees an unemployment rate of 14.6%.
Author: David Ampudia, Economist