Spain’s unemployment figures fall, but will it last?

Spain created almost 100,000 new jobs in May... but how many are seasonal?

Figures from Spain’s ministry of employment have shown that the country’s jobless figures fell by two per cent in May this year – encouraging news that some experts have attributed to the traditional uptake of seasonal employment.

With Spain’s unemployed standing at 6.2 million – 27 per cent of the population – May delivered a hint of better things to come as 98,265 people found jobs, cutting the nationwide dole queue by two per cent…

However, sceptics have pointed out that if seasonal hires in tourism and agriculture were stripped away from the figures, then only 265 jobs were filled in May. Industry minister José Manuel Soria was not to be cowed by such talk, calling the data “the best we have seen since the crisis started.”

Under-fire Prime Minister Mariano Rajoy was also quick to welcome the news, stating that it justified his government’s controversial austerity reforms, despite mass protests around the country that have severely damaged his popularity.

During the euro debt crisis Spain has played the unwanted role of star of the show. As a two-tier labour market threatens – where increasingly few workers enjoy permanent contracts and the numbers hired on cheap short-term contracts soar – the Organisation for Economic Cooperation and Development (OECD) has warned that the country’s jobless figures could top 28 per cent in 2014.

That prediction was countered by economic analysts at Barclays Capital, who believe that the latest economic data, coupled with an improvement in exports and manufacturing that has flooded confidence back into some sectors, will see Spain pull itself out of recession in the early part of next year.

“We think that the latest labour market statistics support our view that the worst phase for the Spanish economy may now be over,” Barclays told investors last week.

Over at the IESE business school, economics professor Antonio Argandona waded into the debate with diplomatic words of encouragement. He called May’s data “satisfying” but warned of future “catastrophe” if such seasonal improvements caused the authorities to shelve further progressive measures designed to get Spain’s economy back on track.

It’s been a long old slog for Spain. Since 2008, things have gotten steadily worse. But the country still functions; things still get done and people still survive. And now, it appears that the end of the hardest part might well be in sight.