Spain: Unemployment falls to eight-year low in Q2
July 27, 2017
Unemployment in Spain fell to an eight-year low of 17.2% in Q2, down from 18.8% in Q1. Compared to the same period of last year, this quarter’s reading marked a notable improvement over the 20.0% recorded in Q2 2016. In absolute terms, the number of unemployed slid to 3.91 million, the lowest level since before the economic crisis, from 4.26 million in Q1. The second quarter traditionally fares better than the first thanks to the boost in tourism in the spring and summer. The recent drop in unemployment highlights Spain’s economic recovery as it continues to fuel strong gains in households’ disposable income.
Looking at the details, employment gains were primarily in the services sector (+272,400), in industry (+65,700) and in construction (+52,100), with a small offset in a decrease in the agricultural sector (-15,200). One downside of the new unemployment figure is the disproportionate rate of temporary to permanent jobs. Although permanent jobs grew by a healthy 93,600 in the second quarter, the figure was overshadowed by the pace of non-permanent employment growth, with temporary jobs up 255,900 in the quarter. While unemployment is finally decreasing after years of painfully high rates, the labor market could stand to see improvements in conditions, particularly in more stable contracts.
Meanwhile, the country’s workforce increased by 34,300 people in Q2 to 22.7 million.
Author: Lindsey Ice, Economist