Spain’s Labour Market in September: A Cautious Recovery Amid Slowdown
September 2023 left a lingering mark as the post-summer rhythm of work slowed. The labor market cooled, and although the balance of new hires remained positive, businesses faced increasing difficulty in securing fresh talent. A positive spillover occurred with 18,295 more workers reporting for work than in August, pushing total Social Security membership to about 20.72 million. Yet this September tally marked the weakest job creation for the month since 2019, following a spring that saw a notable two-year expansion cycle. As winter approaches, the pace of hiring cooled further, underscoring a transitional period for the economy.
Unemployment rose for the second consecutive month, increasing by 19,768 to reach 2.7 million people registered with public employment offices. In Spain, a seasonal pattern was evident: many temporary workers resume job searches after the long summer and the start of the school year, sign up for benefits, and look for new opportunities. This combination kept unemployment trending higher in September, a month when seasonal dynamics typically lift jobless counts.
With these figures, Spain continued to hold the world’s highest unemployment rate in relative terms, even as internal comparisons showed September’s unemployment as the lowest seen in Spain since 2008. About seven in ten unemployed individuals reported receiving some form of aid or subsidy from Sepe to offset income shortfalls. This reliance remains a notable feature of the labour market, reflecting ongoing income support measures that have persisted since the early post-crisis years.
The rise in unemployment and the simultaneous reliance on Social Security support align with a recurring annual pattern. A portion of unemployed people who had not previously registered sometimes sign up to access subsidies or training opportunities, while others enter the labour market through new arrivals, including younger workers or recent entrants who have reached the legal working age. These dynamics help explain the annual rhythm of unemployment data as the year nears its end.
Education Sector: A Seasonal Cushion for Jobs
September typically brings a boost to employment as tourism winds down and schools reopen, and this year’s pattern followed suit with the active workforce rising to around 20.7 million. The month saw 18,295 more workers exiting their roles compared with August. Within sectors, trade, hospitality and public administrations were the primary drag on employment, with substantial losses that reflected the closing of summer operations. These sectors shed workers as the season ended, a trend that the calendar had signposted in advance.
Education stood out as a clear counterweight, adding a significant payroll wave. The sector experienced a notable increase in hiring, supported by schools, colleges and universities expanding staffing in anticipation of the new term. Educational institutions typically absorb seasonal redundancies after the summer and rehire a similar share once the back-to-school period begins, a cycle that helps many organizations avoid paying severance on temporary contracts. This pattern supports overall stability in the face of broader sectoral declines.
Looking ahead, Spain entered the final quarter with a degree of uncertainty about whether the year could close near the level of around 21 million Social Security members. October has historically been a strong month for job creation, often followed by a softer November and a more modest December, depending on the intensity of the Christmas campaign. The year’s seasonal adjustments suggest that reaching a sustained 21 million was unlikely, but close monitoring of monthly data remains essential to gauge the true momentum of the labour market.
Seasonally adjusted data for September showed an increase of 12,921 jobs. This was modestly better than mid-month Government forecasts and points to a gradual slowdown from earlier months. The pace had been higher in April, when job gains reached around 128,000, underscoring how year-over-year shifts can vary with seasonal factors and external conditions.
Madrid Emerges as a Leader in Job Creation
Regionally, the Community of Madrid stood out in September. After a cautious start to 2023 in terms of net job creation, Madrid posted a robust 47,764 new Social Security memberships, highlighting a turnaround in regional dynamics. While most autonomous communities remained in negative territory, Catalonia also showed improvement with an uptick of 9,394 employees, though this was markedly smaller than Madrid’s surge.
When comparing year-to-date figures, Catalonia had added 113,989 employees this year, while Madrid contributed 41,399. The data illustrate a broader national trend where the capital region contributed a smaller fraction of new workers relative to Catalonia, reflecting differing regional economic structures and sectoral strengths.
Overall, the September results offer a snapshot of a labour market at a crossroads: positive net hiring and seasonal resilience in education, but persistent unemployment pressures and uneven regional performance. Analysts and policymakers alike will be watching how these patterns evolve as the year progresses, particularly as schools and tourism influence hiring dynamics in the months ahead. Attribution: official labour market statistics and subsequent analyses draw from public records and monthly reports released by the relevant authorities and researchers in the field.