Unemployment of Spain Declines in 2014

05.01.2015 Auteur: The Wallstreet Journal

MADRID—Spain’s jobless numbers fell sharply in 2014, posting the largest annual drop in the number of unemployed since 1998, an indication that solid job creation and a still significant—albeit reduced—net emigration of working-age residents are contributing to a faster-than-anticipated improvement in the outlook for the country’s labor market.

The Labor Ministry said on Monday jobless claims in December declined by 64,405, to 4.45 million, from November. The seasonally-adjusted number of jobless claims also fell, for the fifth consecutive month.

Spain’s economy has been steadily expanding since it emerged in mid-2013 from its second recession in five years, and analysts say it may grow 2% or more this year. Gross domestic product rose 0.5% in the three months through September, a relatively high level by Eurozone standards.

Spain’s deputy Labor minister Engracia Hidalgo said on Monday labor reforms, which focused on making it cheaper for companies to hire and lay off workers, have been particularly effective in driving the number of new contracts, which soared by two million in 2014 from 2013, including short-term contracts.

Over the past two years, jobless claims in Spain dropped by just over half a million, with a 253,627 decrease last year alone. A key difference is that job destruction continued into 2013—which drove the number of jobs lost during the 2008-2013 crisis to three million, in a country of 47 million residents—while the economy created just over 400,000 net new jobs last year.

Last month, Spain’s statistics institute INE said the country’s population fell at a significantly lower pace in the first half last year, compared with the same period of 2013, as emigration by locals and foreign nationals decreased while immigration increased slightly.

INE’s report—which addresses a subject that has generated much hand-wringing over brain drain in the country—showed that the number of emigrants fell by 21% in the period, while the number of immigrants rose by 2%, including returning Spaniards. Of the net 50,426 departures, half were Spaniards and the other half foreign residents.

In October, INE said Spain’s unemployment rate fell to 23.7% at the end of the third quarter, from 24.5% in the second. INE plans to release the fourth-quarter unemployment rate Jan. 22.