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Unemployment falls in Spain during July to 3.77 million

By Mas Property

on Wed Aug 05 2020

1.18 million workers remain in ERTE temporary redundancy situations. Unemployment in Spain fell by 89,849 in July (-2.33%), the first decline since the start of the pandemic, to a total of 3.77 million unemployed.

The beginning of summer has given a welcome boost to economic activity in Spain after the economic paralysis of lockdown, although the data reveals regional imbalances and the caution of employers in taking on new staff for the summer season.

Employment increased nationally in all sectors, except for Education, which lost 82,789 affiliates, as it does every year in July, coinciding with the end of the school year.

The most seasonal areas of activity, such as hospitality (+66,924 +), health (+43,133) and commerce (+40,816), have increased employment during July as many companies were unwilling to sign work contracts during de-escalation and waited until the state of emergency ended.

The figures are somewhat distorted by the crisis as unemployment increased significantly during lockdown, so claims that unemployment decreased by the largest percentage during July since 1997 must be taken tongue in cheek as there are actually 761,000 more unemployed during July than a year ago.

During the month of July 1.53 million contracts were signed, double that of April, a figure that reflects – in the opinion of the Ministry of Employment – a return to economic activity, although 9 out of 10 contracts were temporary and only 9. 2% were indefinite contracts.

Unemployment reduced notably in the service sector, which has suffered the most from the hibernation of the economy, with 84,563 (-3.09%) fewer people; in industry, with 9,444 (-2.96%) fewer unemployed, in construction with 6,556 (-2.15%) fewer people and in the group without previous employment with 394 (-0.13%) fewer unemployed.

Unemployment fell everywhere except Madrid, Murcia, La Rioja and Ceuta.

There are still 747,656 less affiliates paying into the social security system than a year ago and 761,000 more unemployed.

1.18 million workers remain in ERTE temporary redundancy situations.

These data, as was the case in the figures published in March, April, May, and June, do not include workers subject to a temporary employment regulation file (erte) who reached 3.4 million at the highest point of the pandemic in April. At the end of July, two out of every three people included in the erte scheme during the covid lockdown had returned to work, leaving 1.18 million workers in an erte situation (712,000 fewer than in June.

Of the 950,000 jobs lost since mid-March due to the crisis, 40% (380,000) have been recovered. However, the average number of Social Security affiliates is still at 18.78 million people, far from the 19.25 million affiliates registered in the month of February, before the pandemic began, and the 19.5 million in July of last year. In the last 12 months the system has lost 747,656 affiliates.

Spanish economy shrunk by 18.5% between April and June as recession begins.

The employment figures are no surprise given the decline in economic activity in Spain due to the effects of the Covid crisis. Activity has declined by more than a fifth so far this year, with service industries relating to tourism, transport, restaurants and accommodation the hardest hit, the lack of economic activity effectively wiping out the growth of the past six years.

Spains economy shrank by 18.5% in the second quarter between April-to-June, having already fallen by 5.2% in the first three months of the year.

The country was the worst performer in the eurozone, which saw its overall GDP decline by a record 12.1%.

Source: Spain News Today, August 2020

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