Monthly employment data for August often show a dip, a natural pattern as the summer season winds down. Tourism-related businesses, from beach bars to rural hotels or airport shops, typically adjust to the post-holiday period. As August ends, staffing contracts shrink and workplaces adapt to the last stretch of the year.
Spain posted 185,000 fewer jobs in August; late summer was milder than before Covid
This year followed a familiar pattern. Government figures released this Monday show a loss similar to past summers, with around 180,000 active workers affected across the country. Yet contrary to quick assumptions, the hospitality sector is not the sole driver of the deficit in Social Security accounts.
August data come with a bittersweet tone. Absolute figures are weak, but they appear less severe than in pre-pandemic summers. The month was not dramatic compared with previous years, and the trend points to a slowdown without a worsening climb.
Still, there are varying shades. Some indicators point to a distant horizon while others are more immediate. Unemployment remains higher than in the wider European Union, among other factors. Here are five key takeaways from August.
Employment: Back-to-school comes at a cost
“The rise in unemployment shows that seasonal patterns in an economy cannot be fixed by labor reform alone,” stated Pimec’s general secretary, Joseph Ginesta, in response to the August data. While new regulations have an impact in certain sectors, temporary work and quick turnover dynamics persist in several labor market strongholds, though not always to the same extent.
The hospitality sector, which typically sheds workers as August ends, did not disproportionately drive the decline in memberships last month. A total of 1,333 positions were cut in an industry that employs about 1.6 million people and bears the hallmarks of ongoing fluctuations.
Where does the impact come from? Education is a major factor. One in three job cuts occurred in this sector, especially in camps, education centers, and other recreational facilities where families enroll children outside the school year.
Employment expected to rise, but at a slower pace
In a month where seasonality carries a heavy weight, seasonally adjusted data clarify the underlying trend. The government’s analysis isolates this seasonal component to assess whether momentum remains positive or negative beyond the usual fluctuations. Using this method, employment rose by 17,745 people in August.
That is a positive figure, yet it confirms the cooling trend observed in recent months. After two and a half years of strong growth and a particularly explosive spring for job creation, the rate is easing. On average, seasonally adjusted monthly gains for 2023 are around 60,262 members, roughly 3.4 times higher than the August figure.
Time will reveal how the labor market evolves in the final quarter, traditionally a tougher period for hiring as companies tighten workforce expansion.
Unemployment: A renewed rise, albeit moderate
August’s headline might be read as modestly negative. Employment fell, but not as sharply as in other Augusts. Unemployment rose again, but to a lesser degree than in historical patterns. About 24,826 people entered unemployment, pushing the total to about 2.7 million. The government emphasizes that this is the smallest August increase since 2016.
Unemployment remains a persistent challenge for the Spanish labor market for another month. Spain still has the highest unemployment rate in the European Union, although the coverage rate has improved in recent years. In practical terms, seven out of ten registered unemployed individuals receive some form of benefit or subsidy from Sepe.
Bad month for the self-employed
2023 has been difficult for autonomous workers. After surviving the pandemic with resilience and confronting the current price pressures, the self-employed segment faces a slow pace of change. Since last December, the number of self-employed who either left or joined RETA has been nearly flat. In August, a negative balance marked the second consecutive month, with about 10,945 self-employed workers leaving. The cohort stood at about 3.3 million.
The summer months show notable volatility in registrations and deregistrations among the self-employed, with losses spread across most activity areas. A common thread is the education sector, which sees significant turnover. The self-employed face a new pricing regime tied to net income, and it remains to be seen how many will opt out if thresholds prove burdensome in the second half of the year.
Catalonia leads in job losses while Madrid continues to unwind
The job losses display regional and sectoral breadth. The end of the tourist season hit areas like Catalonia hard, compounding education-related declines. In absolute terms, Catalonia recorded 60,317 fewer jobs, with a total contribution base around 3.6 million.
The August setback carried notable weight in the Levante and in Madrid. Although seasonal effects were less pronounced in Madrid, 36,860 people stopped contributing out of roughly 3.5 million. Madrid continues a slow cycle of decline in 2023, tallying a negative balance of 6,365 employed so far this year, versus a positive 104,595 new positions in Catalonia.