Spain’s unemployment rate fell to its lowest level in two years in the second quarter, data showed yesterday, lifted by strong job creation in the services sector and adding to hopes of a sustained economic turnaround.
Unemployment fell to 24.5 per cent from 25.9 per cent a quarter earlier, the National Statistics Institute said.
The headline figure remains the second highest in Europe but the drop was steeper than expected as more than 400,000 people started work, the largest quarterly increase since the second quarter of 2005.
“These figures are much better than expected and while there’s an important seasonal element, seasonally adjusted figures are also strong,” said Jose Luis Martinez, economist at Citi in Madrid.
“I have the feeling that there has been a very sharp halt in activity in the last two years, maybe more than is rational, and that’s starting to normalise.”
Spain has been in and out of recession since a housing bubble burst in 2008, leaving millions of low-skilled labourers out of a job and sending the unemployment rate from a low of around 8 per cent in 2007 to a high of near 27 per cent last year.
After years of painful fiscal adjustments and structural reforms, the country’s economy is now expected to grow by over 1.2 per cent this year and as much as 2 per cent in 2015, making it one of the strongest performers in the eurozone.
While the second quarter tends to be a strong period of job creation as the vital tourist season begins, seasonally adjusted data were also positive.
In seasonally adjusted terms, unemployment fell by 3.12 per cent from the previous quarter, marking the fifth straight quarter of falls, as employment rose 1.03 per cent.
The quality of employment also improved, with 304,400 new jobs being full-time while 180,200 contracts signed were permanent ones, suggesting that companies anticipate the recovery will remain strong in coming months.
A total of 5.6 million Spaniards were unemployed, according to the quarterly poll, while the number of people working or available for work rose by 92,000 from a quarter earlier to 22.976 million.