The Spanish unemployment report for the first quarter (Q1) of 2024, released by the National Statistics Institute (INE), indicates a rise in unemployment to 12.29%, compared to 11.80% in Q1 2023. This figure exceeds analyst forecasts.
The increase in unemployment is attributed to the prevalence of temporary contracts in Spain, particularly within the tourism and hospitality sector, as well as persistently low productivity levels.
Despite the rise, Spanish unemployment remains relatively close to historically low levels, owing to various labor market measures aimed at promoting job stability.
ING, a Dutch financial institution, acknowledges the impact of reforms, particularly the 2022 labor reform, in reducing temporary contracts and improving job stability. However, they suggest further reforms may be necessary in the future.
While the unemployment rate is expected to remain stable in 2024, factors such as slowing job creation and immigration flows may exert upward pressure on the rate.
Spain’s retail sales report for March 2024 reflects a growth slowdown compared to the previous month, with a year-on-year increase of 0.6% and a month-on-month decline of 0.5%.
Despite its high unemployment rate, Spain continues to attract foreign workers, particularly from Latin America, drawn by factors such as language compatibility and economic opportunities. This influx of skilled migrants benefits sectors like hospitality and technology, akin to the economic gains witnessed in the United States through skilled immigration.
