Spain: Unemployment inches higher on seasonal effects
April 27, 2017
Unemployment in Spain rose from an over seven-year low of 18.6% in Q4 to 18.8% in the first quarter of the year, traditionally a weak period for the country’s labor market due to the end of temporary jobs linked to the winter holiday. Compared to the same period of last year, this quarter’s reading marked a notable improvement over the 21.0% recorded in Q1 2016. In absolute terms, the number of unemployed totaled 4.26 million people in Q1, an increase from the 4.24 million recorded in the previous quarter. Although the seasonal components argue against reading too much into this quarter’s data, unemployment still remains one of the economy’s weakest flanks and stands as the second highest in the Eurozone.
Looking at the details, employment gains were mixed in Q1. A large decrease in the services sector (-94,700 jobs) and in industry (-8,200 jobs) more than outdid gains in employment observed in the agricultural (+31,000 jobs) and construction (+2,100 jobs) sectors. The report’s silver lining was the composition of new occupation. While 122,600 temporary jobs where shredded in Q1, 78,000 permanent jobs were created in the same quarter, which suggests an improvement in the quality of the Spanish labor market.
Meanwhile, the country’s workforce decreased by 52,600 people in Q1 to 22.7 million. Although the reading was smaller than Q4’s figure, when the workforce shrank by 102,400 people, the Spanish workforce now sits at its lowest level since the financial crisis.
Author: David Ampudia, Economist