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Economy in Brief

Spain Labor Markets Show Employment Gains, Lower Unemployment Even Aside from Data Revisions
by Carol Stone April 29, 2005

Employment in Spain is picking up, according to the Q1 labor force survey reported today by the National Institute of Statistics ("INE"). Unemployment is working its way lower.

At the same time, changes to the data collection, both historic and current, make this picture somewhat fuzzy. On March 30, the INE published revisions to historical data back to 1996 to include better coverage of immigrant workers. Then, this quarter, the INE used a new survey questionnaire in line with EC-mandated conventions and it altered its data collection methods.

According to the INE, the first set of revisions raised the working-age population by 1.6 million in Q4 2004. They added almost 965,000 to total employment, and 152,000 to unemployment in that period. Subsequently, the new survey in Q1 2005 added another 132,000 to employment and lowered unemployment by 78,000. The results are indicated in the table below. All the data there are consistent with the population count and immigrant inclusions factored into the March revision. The numbers in parenthesis for Q1 2005 show what would have been tabulated before the newest technical and survey modifications.

Thus, the "published" data show a rise in employment over Q4 2004 of 204,600, but supplemental information from the INE show that only 35% of that represents outright strengthening in labor market activity. Even so, the resulting 4.3% increase over a year ago compares favorably with the performance of employment during the prior three years, when it averaged 3.8% growth. Advancement in labor market conditions is also seen in the lower unemployment rate. It reached 10.6% in Q4, the lowest since 2001. Reported data show a still lower 10.2% in Q1, although the Spanish statisticians' compilation of comparable data show that all of that downshift is attributable to the data revisions. Even so, this is still a healthy development. It is accompanied by a high and rising participation rate, which, in turn, is based on the more comprehensive measurement of the population of Spain, both Spaniards and immigrants.

  Q1 2005 Q4 2004 Year Ago 2004 2003 2002
Employment (thousands)
  (% change)
18492.7(18360.7) 18288.1 5.1(4.3) 3.9 4.0 3.0
Unemployment (thousands)
  (% change)
2099.5(2177.4) 2159.2 -8.2(-4.8) -1.3 4.0 13.2
Participation Rate (%) 56.9(56.75) 56.7 55.9 56.3 55.5 54.3
Unemployment Rate (%) 10.2(10.6) 10.6 11.5 11.0 11.5 11.5
Industry Employment (thousands)
  (% change)
3257.5(3203.7) 3246.8 2.6 0.3 0.3 0.4
Services Employment (thousands)
  (% change)
11947.3(11804.9) 11729.6 6.3 4.7 5.1 4.1
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