Spain’s unemployment rate falls in October for the first time in 46 years

by Lorraine Williamson
unemployment rate

MADRID – The number of unemployed people in Spain fell by 734 in October. This is not a huge drop in the unemployment rate. But it is the first fall in October since 1975 when statistics were first published. The good news is that unemployment in Spain has now fallen for eight months in a row. 

In total, the number of unemployed fell by 751,721 during this period. At the end of October, there were still 3,257,068 job seekers registered in the registers of the Ministry of Labour and Social Economy. This figure is still 11,000 higher than that of February 2020, the last month before the pandemic broke out. 

Record high number of employed 

Social security statistics have again reached a record high with 19,662,163 people in work, this figure is seasonally adjusted. This number rose for the sixth consecutive month. Since May last year, the number of employed has increased by 642,539. 

The Spanish Secretary of State for Employment and Social Economy, Joaquín Pérez Rey, called the results ‘truly extraordinary’. He pointed out the figures show ‘the government took the correct measures during the pandemic.  And they managed to keep employment and the productive sectors in check without the crisis becoming structural and permanent’.  

With 4,683 fewer unemployed, the service sector showed the largest gross decrease, which represents a drop of 0.2%. Construction, with 4,523 fewer unemployed (-1.7%), and industry, with 847 (-0.3%), also showed better figures. In contrast, unemployment in the agricultural sector rose by 7,577, and in the group of people without prior employment, the number of unemployed rose by 1,742. 

Regional differences 

The differences between autonomous regions are large. Madrid saw the number of unemployed fall by 9,851, the Canary Islands by 5,242, Castile and Leon by 2,774 and the Valencian Community by 2,542. This is followed by the Basque Country (-1,063), Navarre (-560), Catalonia (-510) and La Rioja (-284). At the other end of the spectrum, Andalusia’s significant increase in unemployment (+8,600) is notable, mainly driven by the service sector (+5,677) and agriculture (+1,192).  

Problems in the labour market 

Spain faces two unsolved labour market problems: high youth unemployment and high temporary employment. Unemployment among under-25s rose by 5,867 in October, 2.3% more than in September. A total of 378,762 young people in this age group cannot find work. Of the 1.9 million contracts registered in October, only 198,496 were permanent contracts, a rate of 10.5%. This is in stark contrast to the 1.7 million temporary contracts signed last month. 

Highest unemployment rate in the EU 

Despite the rapid recovery in employment, Spain still has the highest unemployment rate in the entire European Union. According to data published by Eurostat, the harmonised unemployment rate in Spain reached 14.6% in September, more than double the EU average (6.7%). 

Still 190,000 workers with ERTE 

The number of workers on temporary lay-offs (ERTE) fell again last month and now stands at 190,718, down 48,500 from the end of September. The percentage of people with ERTE is only 1.25% and 95% of the jobs that had to be protected by possibility have been reactivated.  

Of the nearly 200,000 workers who have not yet fully resumed their work, one-third have a part-time ERTE, while for the remaining 127,000 their jobs have been fully suspended. The Secretary of State for Social Security and Pensions, Israel Arroyo, expects the use of the ERTE to change dramatically in November following the entry into force of a new system that will require companies to reapply for ERTEs and propose a training plan. 

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