Significant Decline in Unemployment and Growth in Employment: A Record Year for Job Market
In a remarkable turn of events, the job market in 2024 witnessed a substantial decline in unemployment and a notable increase in employment, sending positive signals for the economy. According to the National Institute of Statistics (INE), unemployment decreased by 265,300 people, marking a 9.3% reduction compared to 2023. This decrease brought the total number of unemployed individuals to just under 2.6 million, the lowest figure recorded since the second quarter of 2008.
Simultaneously, employment surged as the economy generated an impressive 468,100 new jobs, closing the year with a record total of 21,857,900 employed individuals. This growth in employment, while not surpassing the previous year's job creation of 783,000, did exceed the 278,900 jobs created in 2022. Notably, the decrease in unemployment has now been a consistent trend for four consecutive years, reflecting the recovery post-COVID-19 pandemic.
The overall unemployment rate at the close of 2024 stood at 10.61%, a figure nearly 1.2 percentage points lower than the previous year. The Ministry of Economy, Trade, and Business emphasized that both the drop in unemployment and the rise in employment were achieved amidst an increase in the active population, which expanded by 202,800 people or 0.84%.
The fourth quarter of 2024 marked a particularly robust performance, witnessing a decline of 158,600 in the unemployment numbers—an impressive 5.7% reduction—and a slight employment increase of 34,800 people, or 0.01%. This points toward an acceleration in job creation and a rapid decrease in unemployment as the year came to a close.
A major contributor to this positive turnaround appears to be the private sector, which accounted for the lion's share of new jobs, generating 453,500 positions, roughly 97% of the total. Furthermore, more than half of the newly created jobs in 2024 were full-time positions, with an increase of 290,700 compared to 177,400 part-time jobs.
The temporary employment sector, however, faced a decline as the temporary employment rate fell to 15.48%. Permanent contracts rose significantly, with nearly 590,000 new permanent roles added, while temporary hires dropped by 133,900.
The data also revealed that the reduction in unemployment was especially prominent among women, with 167,100 fewer unemployed women reported, compared to a reduction of 98,300 in male unemployment. This shift suggests a positive trend in gender equality in the workplace, which could be attributed to various governmental and social initiatives aimed at promoting women's participation in the job market.
In response to the evolving labor landscape, the CEOEs have countered union proposals for an increase in the Minimum Interprofessional Wage (SMI) with a proposal for a 3% increase alongside reductions in working hours. The labor proposal suggests a hike of 50 euros, bringing the minimum income to 1,184 euros per month, a rise unions deem insufficient as they seek to reach a target of 1,200 euros.
Overall, 2024 has proven to be a year of significant transition for the job market, with reductions in unemployment and growth in employment highlighting some resilience in the economy as it continues to recover from the pandemic-induced challenges.
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