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Spain’s June Employment Data: At Best Ambiguous

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Some key statistics from Spain’s National Employment Office June report:

* Monthly change in registered unemployed: -127,248 (good)
* Yearly change in registered unemployed: +148,411 (not good)
* Monthly change in new contracts: -6,006 (not good)
* Monthly change in new permanent contracts: -8,507 (not good)
* Yearly change in new contracts: -109,084 (not good)
* Monthly change in eligible unemployment beneficiaries: -49,111 (good from a fiscal point of view anyway…)

So the story in Spain seems to be that the tourist season is providing a better than expected “shot in the arm”, but the economy as a whole is no where near generating sufficient job creation, much less permanent contracts, to significantly reduce unemployment. The change in registered unemployment is due to a surfeit of temporary summer contracts, emigration and long-term unemployed drop-out.

We’ll have to wait until July 25th when the National Statistics Institute publishes its Active Population Survey (EPA) in order to see the active population rate, but I wouldn’t be surprised to see a deterioration of that rate and a small ongoing decline in the total Spanish population. We’ll have to wait until August for the Bank of Spain’s Statistical Bulletin for more information on consumption, business investment and financial flows. It’s really hard to see those turning strongly positive, despite a good tourist season.

For more analysis, take a look at my article: “The Clearing In the Woods: Is Spain’s Good News Too Good to be True?”

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