The Ministry of Social Security, led by José Luis Escrivá, anticipates a good behavior of the labor market in August after the bad data in July. Although it is a month in which jobs are always destroyed and unemployment rises at the end of the tourist season, Social Security estimates that the loss of workers will be around 187,000 people on average, somewhat less than usual in previous years of economic growth . And above all, it underlines that, in seasonally adjusted terms, employment increased by 65,000 Social Security affiliates, a high rise compared to last month and compared to August of previous years.
Bad employment data in July: pothole or a warning of things to come?
In average terms, employment will fall by some 187,000 affiliated people, estimates the Social Security. “A smaller setback than the average of the pre-pandemic years, of less than 199,000,” he points out.
If we look at the figures for past years, shown in this graph, the Social Security forecast is for an average drop in employment lower than those recorded in years such as 2019 (213,000 fewer affiliates) and 2018 (-203,000).
65,000 more jobs, seasonally adjusted
But the most relevant data for the department headed by Escrivá is the evolution of employment in seasonally adjusted terms, which isolates seasonal factors that condition it and allows for a simpler comparison of the performance of the labor market month after month. It is the reference data of the Ministry to measure affiliation.
The Ministry highlights a “remarkable dynamism” in employment in August “with an expected increase in Social Security affiliates of 65,000 people in seasonally adjusted terms, according to the experimental statistics prepared with the data available in the first fortnight of the month” .
This increase of 65,000 people “is above the monthly average of job creation for the 2017-19 period and for the January-July 2022 period,” Social Security highlights. In July, the increase in seasonally adjusted employment was much lower than the 30,000 forecast by the Ministry in the middle of the month, with a final result of 9,104 more affiliated people.
Escrivá has also highlighted that job creation continues to be more powerful in “high added value” sectors, at a rate “much higher than average”. For example, in the computer and telecommunications sector, and professional, scientific and technical activities.
A lot of attention to employment after July
This Wednesday, the forecast of the Social Security employment data presented in the middle of each month by Minister José Luis Escrivá was especially expected. After the poor record in July, many eyes are attentive to the labor market to see if last month there was a mere bump in its good progress in the last year or if, on the contrary, a slowdown is being registered and a first sign of cooling of employment as a result of the current economic situation of great uncertainty and soaring inflation.
August is usually a bad month for employment in Spain due to seasonal reasons, at the end of the tourist season and the summer period. Employment is reduced and unemployment increases every year on these dates, as the graphs in this piece show.
For this reason, the key to measuring the situation of the labor market and assessing the Social Security forecast is not so much whether employment will be destroyed and unemployment will increase this August (which is normal) but how these figures compare with previous years, as the statistician Raül Segarra explained here.
From this framework, the Social Security forecast reflects an August in line with previous years and, even, somewhat better despite the adverse international context.
More permanent workers
The Ministry of Social Security also highlights as positive that the data for August “also show that the displacement of hiring towards indefinite formulas caused by the labor reform is consolidating as a trend”.
In August, the percentage of workers with an indefinite contract reaches “81% of the affiliates”, reports Social Security, which represents an increase of “12 percentage points” compared to previous years (average 2015-2021).
“Among those under 30 years of age, the increase is 31 percentage points: from 34% on average in August of the years 2015-2021 to 65% in August 2022,” adds the Ministry, which figures in a total of “1 .6 million more affiliates with indefinite contracts than in the pre-pandemic years”.