Job creation pace decelerated in July, leading to a three-year low in unemployment rates
In July 2023, Spain's unemployment rate was approximately 12.2%, with a total of around 2.4 million unemployed people recorded, according to data close to that period. The unemployment level showed a slight month-on-month decline in July 2023, reflecting a modest improvement compared to some previous years, though it remained relatively high by European standards.
Key analysis and trends for July 2023 and preceding years include:
- Unemployment Rate: The rate reached almost 12.2% in 2023, which marked a gradual improvement expected to continue, with forecasts predicting a decline by about 0.8 percentage points over coming years. This contrasts with prior years when unemployment often exceeded 14% following the financial crisis.
- Youth Unemployment: Youth unemployment has been a critical issue; data through 2023 show that unemployment among young people suffered from particularly high rates historically, though recent figures indicate some reduction, especially for those under 25 years old.
- Regional Differences: Unemployment rates were uneven across Spain. Southern regions such as Andalusia, Extremadura, and Melilla had significantly higher unemployment rates (up to near 29% in Melilla), whereas northern regions like the Basque Country and Cantabria had rates below 8% in late 2023 and early 2024.
- Employment Affiliation Trends: Social Security affiliation (reflecting employment registrations) showed positive signs by mid-2023, with over 21 million people affiliated and gradual growth in employment numbers. This growth contributed to lowering the unemployment rate marginally.
- Sectoral Dynamics: Unemployment changes by sector in 2023 showed a mixed picture, with some sectors like agriculture seeing declines in unemployment, while construction, industry, and services occasionally experienced increases at different times in the year.
- Comparisons with Previous Years: Spain suffered from very high unemployment after the 2008 crisis, peaking near 26%, and saw gradual decreases through the early 2020s. The forecasted downward trend in 2023 and beyond signaled ongoing recovery but at a moderate pace, with structural issues such as youth unemployment and regional disparities persisting.
In July 2023, the employers' association CEOE warned that the increase in affiliation was lower than the average of the previous months of July from 2014 to 2019. The Ministry of Labor and Social Security and Migration published the unemployment and affiliation data for July 2023, which showed an increase in affiliation to be weak, with 4,408 new affiliates, a 0.02% increase. The number of affiliates subject to a temporary contract grew by 0.8% in July. The rate of temporality has registered an increase of one tenth, in July, up to 13.7%.
The largest decreases in unemployment occurred in Andalusia (-8,035) and Asturias (-1,296) in July 2023. Unemployment decreased in 6 of the 17 autonomies and in Ceuta and Melilla in July 2023. However, the majority union of civil servants, CSIF, reported the destruction of 179,267 jobs in the educational sector during June and July 2023. The construction sector had 100 more unemployed, industry had 400 more, and services had 2,000 more unemployed people in July 2023. The effect was much more severe in July 2023, with 123,699 fewer jobs in the sector, mainly temporary staff.
Seasonally adjusted data shows an increase in unemployment by around 1,200 people in July 2023. The Minister of Labor, Yolanda Díaz, justified the limited fall in unemployment in July 2023 by the fact that contracts are being advanced in vacation periods. The best employment performance was seen in the Balearic Islands (+12,579), Galicia (+10,835), and the Valencian Community (+6,968) in July 2023.
Sources:
- El Mundo
- El País
- INE
- Eurostat
- CEOE
- In the realm of business and finance, the employers' association CEOE flagged concerns in July 2023, stating that the increase in employment affiliation was lower than the average of the previous July months from 2014 to 2019.
- A significant development in the art and finance sector in July 2023 was the decrease in unemployment in the Balearic Islands (+12,579), Galicia (+10,835), and the Valencian Community (+6,968), signifying positive employment performance and potential growth in these regions.
