Unemployment Hits Historic Low as Employment Surges in Q3 2023
According to the National Institute of Statistics (INE), unemployment in the third quarter of 2023 fell by 1,200 individuals, marking a decrease of 0.04% compared to the previous quarter. This brings the total number of unemployed individuals to 2,754,100, translating to an unemployment rate of 11.21%, the lowest level since 2008. Concurrently, the economy witnessed the creation of 138,300 new jobs, leading to a record high in employment figures at 21,823,000 workers.
Carlos Cuerpo, the Minister of Economy, Trade, and Business, highlighted the positive trends reflected in the Employment and Unemployment Survey (EPA) for the third quarter. Notable increases were observed across various employment sectors including a peak in the active population, private sector employment, and a notable reduction in the number of unemployed individuals. By the end of September, the active workforce approached 24.6 million, which is an increase of 137,100 individuals from July to September, representing a growth rate of 0.5%.
The activity rate has also seen a slight uptick, rising by over a tenth to reach 59.04%. A particularly encouraging sign for the economy is that private sector employment surpassed 18.2 million, with an increase of 155,500 jobs during the summer months, accounting for a significant 0.8% growth.
In contrast to the robust growth in the private sector, the public sector witnessed a shrinkage in workforce numbers, with a decrease of 17,100 employees, bringing the total public sector workforce to 3,540,800.
This overall decline in unemployment during the third quarter stands in stark contrast to the increases seen in the summers of 2022 and 2023, where unemployment rose by 92,700 and 60,800 individuals, respectively. Notably, the third quarter of 2021 had also seen a decrease of 127,100 in unemployment figures.
In relation to job creation, the 138,300 new jobs generated in the third quarter, while lower than the summer growth of 209,100 jobs in 2023, exceeded the increase witnessed in summer 2022, where only 77,700 jobs were added.
Looking at the broader situation over the past year, unemployment has decreased by 140,400 individuals, reflecting a 4.8% annual reduction. During the same time, a total of 376,600 jobs have been created, marking a significant 1.7% growth in employment. Additionally, the number of active workers increased by 236,100 individuals, a growth of 1%.
The INE also reported that the number of wage earners rose by 224,000 in the third quarter, representing a 1.2% increase. This included a rise in permanent employment of 102,700 individuals (a growth of 0.6%) and an increase of 121,300 temporary workers, which amounts to a staggering 4.1% spike in that sector.
Overall, the third quarter of 2023 paints a very optimistic picture of the labor market, characterized by a continued trend towards job growth and a reduction in unemployment rates.
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