Global| Oct 27 2006Spanish Labor Markets Remain Vigorous
Summary
Employment in Spain expanded "only" 3.7%, year-on-year, in Q3, less than the 4.2% and 4.9% of Q2 and Q1, respectively. Even so, this is still 2.3 times as fast as the growth in working-age population (age 16 and over) and unemployment [...]
Employment in Spain expanded "only" 3.7%, year-on-year, in Q3, less than the 4.2% and 4.9% of Q2 and Q1, respectively. Even so, this is still 2.3 times as fast as the growth in working-age population (age 16 and over) and unemployment continues to fall. In Q3, the unemployment rate was just 8.2%, the lowest since Q2 1979, more than 27 years ago. Further, at that time, the labor force participation rate was only 49.3%, about 9 points lower than the latest 58.4%.
The industrial structure of Spanish employment somewhat resembles that in many Western countries. The number of "industry" jobs has been nearly flat for the last few years. But as seen in the second graph, those jobs had been growing before this: from 1996 to 2002 they expanded at more than a 3.5% annual rate. At the same time, in all of Europe, industry employment was flat, and since the middle of 2001 it has fallen consistently. The service sector in both regions has shown gains, though. For all of Europe, this expansion has been between 2% and 3%, with some slowing recently. In Spain, though, these jobs have been growing at about 5%, and recent periods have maintained that pace. Employment opportunities in Spain look favorable.
On the unemployment side of the ledger, we can't help but recall the riots in France among young frustrated "wannabe" workers just about a year ago. What's the situation in Spain? It seems to be some better. Unemployment rates for ages under 25 are far higher than for the general population, to be sure, with Q3 at 16.9%. But this level includes some improvement. Two years ago, the rate was 21.6%. In the year from Q3 2004 to Q3 2005, employment among this group actually surged by 8.7%; it has held steady at last year's level across the latest four quarters. The resulting unemployment conditions are shown in the last graph, which contains harmonized data compiled by Eurostat and reported yesterday through September. Spain's youth unemployment is now about equal to that of Europe as a whole, a substantial improvement relative to the far higher rates of three years ago and more.
| Spain, NSA, Millions | 3Q 2006 | 2Q 2006 | Q3 2005 | 2005 | 2004 | 2003 |
|---|---|---|---|---|---|---|
| Employment | 19.90 | 19.69 | 19.19 | 18.97 | 17.97 | 17.30 |
| Industry | 3.29 | 3.29 | 3.31 | 3.28 | 3.21 | 3.20 |
| Construction | 2.59 | 2.52 | 2.40 | 2.36 | 2.25 | 2.10 |
| Services | 13.10 | 12.93 | 12.49 | 12.34 | 11.52 | 11.00 |
| Unemployment | 1.76 | 1.84 | 1.76 | 1.91 | 2.21 | 2.24 |
| Unemployment Rate (%) | 8.2 | 8.5 | 8.4 | 9.1 | 11.0 | 11.5 |
| Participation Rate (%) | 58.4 | 58.3 | 57.4 | 57.4 | 56.4 | 55.5 |
Carol Stone, CBE
AuthorMore in Author Profile »Carol Stone, CBE came to Haver Analytics in 2003 following more than 35 years as a financial market economist at major Wall Street financial institutions, most especially Merrill Lynch and Nomura Securities. She has broad experience in analysis and forecasting of flow-of-funds accounts, the federal budget and Federal Reserve operations. At Nomura Securites, among other duties, she developed various indicator forecasting tools and edited a daily global publication produced in London and New York for readers in Tokyo. At Haver Analytics, Carol is a member of the Research Department, aiding database managers with research and documentation efforts, as well as posting commentary on select economic reports. In addition, she conducts Ways-of-the-World, a blog on economic issues for an Episcopal-Church-affiliated website, The Geranium Farm. During her career, Carol served as an officer of the Money Marketeers and the Downtown Economists Club. She has a PhD from NYU's Stern School of Business. She lives in Brooklyn, New York, and has a weekend home on Long Island.
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