A Surge in Unemployment: The Latest Labor Market Trends and Insights
Unemployment rose significantly by 193,700 people between January and March, marking a staggering 74% increase compared to the previous quarter, as reported by the National Institute of Statistics (INE) on Monday. This troubling trend has also seen employment decrease by 92,500 individuals, primarily in the public sector, which lost 92,200 jobs. This increase in unemployment during the first three months of the year represents the most considerable rise for this quarter since 2013, when there was a spike of 257,200 individuals.
At the end of March, the total number of unemployed individuals reached 2,789,200, the highest figure since the first quarter of 2024. Conversely, the number of employed persons dwindled to 21,765,400, falling below the record of 21.8 million employed noted in the last two quarters of 2024.
Despite these unsettling figures, the Ministry of Economy, Trade and Business has highlighted that when seasonally adjusted, the number of employed exceeded 22 million for the first time, thanks to a growth of 159,700 people (0.73%) during this first quarter. This statistic points to some dynamism in the labor market, with growth patterns suggesting more stable employment opportunities in higher value-added sectors, as remarked by the Department led by Carlos Cuerpo.
The recent surge in unemployment raised the rate to 11.36%, its highest point since the first quarter of 2024, marking an increase of over seven-tenths. The Ministry of Economy reminds us that the seasonally unfavorable nature of the first quarter typically leads to such trends. However, they noted that this quarter's unemployment rate is the lowest recorded for first quarters since 2009.
In a somewhat positive light, the activity rate saw a slight increase to 58.57%, with the number of active individuals rising by 101,200 between January and March, pushing the total to 24.6 million. This growth, according to the Economy Ministry, reflects the growing confidence of workers in the labor market's dynamism.
Over the past year, there has been a decrease in unemployment by 188,700 individuals (6.3%), and a considerable number of jobs have been created—515,400 jobs (24%). In terms of active individuals, the number climbed by 326,700 (13%), while in seasonally adjusted terms, almost 520,000 jobs have been created in the last twelve months.
Notably, the decline in salaried workers was also observed in the first quarter, with a reduction of 90,000 workers (0.5%), mainly affecting temporary employment—which dropped by 80,200 individuals—while salaried workers with indefinite contracts decreased by 9,800 (0.69%), totaling 15.7 million.
As the economy navigates through these challenges, these labor market metrics provide a crucial insight into the evolving employment landscape. Stakeholders must pay close attention to these trends as they develop in order to respond effectively.
Related Sources: