The second quarter brought a notable uptick in employment activity across Spain, with fewer unemployed people and a busier economy. The Labor Force Survey released by INE confirms a strengthening labor market in April and June, despite ongoing inflation and general fatigue in the economy. Unemployment declined by 1.2 percentage points to 12.5 percent, while employment rose by 383,300 new jobs, surpassing the growth in the active workforce. In total, 20.46 million people were employed across the country during this period.
As Spain moves into the summer season, the labor market shows resilience after the covid-era shocks, though prospects for the autumn are uncertain due to persistent increases in interest rates and prices. The data point to more intensive and higher-quality work arrangements, with the EPA for the second quarter also highlighting the early effects of the ongoing labor reform. In this quarter, roughly 600,000 people entered into permanent contracts, signaling a shift toward more stable employment relationships.
The new hiring rules took effect in April, and their initial impact featured the most pronounced drop in temporary employment in the historical record. The share of temporary contracts fell by nearly two percentage points to 22.3 percent. Spain has not seen such a low level of temporary work in recent memory and continues to register the strongest indicators for job quality in Europe. The decline in temporary contracts has affected both men and women, with a noticeable gender gap in longer-term implications and overall contract stability.
Private sector attracts the momentum
Early stages of the recovery following the pandemic were partly driven by a rebound in public sector hiring, especially in health and education. In the current cycle, the private sector is leading the push, pulling the economy forward. The acceleration in private employment can be linked to seasonal campaigns and the rebound in consumer activity, with Easter and the prior summer season playing key roles. Over the last twelve months, private-sector employment rose by 782,100 jobs while the public sector added about 14,300 positions, illustrating a broad-based recovery across the economy.