Sunday, October 1

Uncertainty causes the first job destruction in July and unemployment increases by 3,200 people

Bad employment data in July. As the Government had warned, the economic uncertainty was noted in the labor market, which had endured to date with very good records and which finally suffered last month, especially since the second fortnight. Contrary to the usual increases, employment was destroyed for the first time in the historical series in this July, with 7,366 affiliated people less than average, mainly due to a fall in employment to maximums in the Education sector. Although in seasonally adjusted terms employment rises, this does so much less than in previous months: by 9,104 people (compared to the average rise of more than 43,000 monthly affiliates so far this year). Registered unemployment for its part increased by 3,230, with the first rise in unemployed in this month since 2008.

Unemployment falls to the lowest rate since 2008 with indefinite work triggered after the labor reform

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In July, employment generally rises and registered unemployment falls. This year has not been like that, at a time of great economic uncertainty due to the effects of the war in Ukraine, which has sent prices skyrocketing and led to an international energy crisis. In the Government they warn of the distorting element, each year, of job losses in Education, which has not been compensated this year by greater growth in employment in other sectors.

In the Executive they consider that this lower increase in workers in other sectors on this occasion is mainly due to two issues: economic uncertainty and a change in the hiring trend, so that employment grows a lot in June to the detriment of July.

The vice president Nadia Calviño has assessed the employment figures first thing in the morning, in an interview on Cadena Ser, in which she has recognized that “there is a slowdown in employment in this month of July”, but has underlined the need to assess “the paradigm shift” achieved with the labor reform, with much more permanent employment, and in the advances in employment so far this year.

“The volatility of a specific month should not distract us from the big figures,” the Executive’s economic manager has asked, admitting that “curves are coming” due to the context of “enormous uncertainty” in the economy.

“It is not the first time that unemployment has risen slightly in the month of July,” says the Ministry of Labor. Although it is very infrequent: it did so in 2005, 2007 and 2008. “The increase on this occasion has been significant from the middle of the month, largely due to international uncertainty,” indicates the department headed by Yolanda Díaz.

With the rise in registered unemployment of 3,230 people compared to June, the total number of unemployed people registered at the SEPE offices stands at 2,883,812. However, thanks to the large decreases in the number of unemployed in previous months, it is the number of unemployed “lowest in the last 14 years in a month of July,” says Labor.

By gender, unemployment increased among women and decreased among men, by 4,573 and 1,343 people, respectively.

Destruction of employment, especially in Education

Regarding the affiliation of workers, the average fall of 7,366 affiliated people leaves the total number of workers at 20,340,964 on average. In the last twelve months, job creation was 749,236, which reduced the rate of increase in employment to 3.82%.

The department headed by José Luis Escrivá (which always analyzes seasonally adjusted data) point out that “the moderation in employment growth in July is concentrated in very unique sectors such as Public Administrations, Education, Construction and Agriculture, which may be linked to factors of a natural nature. transitory or to meteorological factors”.

Social Security focuses its gaze on these specific sectors, while noting that others continue with “remarkable dynamism” (information and communications, scientific activities) and others such as the hotel industry present “behavior is that of a normal month of July”.

In average terms, in the General Regime (where the majority of wage earners are grouped), the falls in employment are concentrated in Education and Agriculture (-51,496). The education sector generally destroys jobs in the summer, July being a period of sharp declines, but this year the fall has been much greater: 115,528 jobs were destroyed compared to the previous month, 11% of the total.

The Self-Employed Regime (RETA), which does experience falls in employment in other months of July, has lost 10,422, a high figure for this month according to the historical series. In this regime, the decrease is extended to more sectors, although it is also headed by the education sector, with 4,537 fewer self-employed workers (-4.66%).

In the Ministry of Labor they highlight that in the area of ​​Education is where the rise in unemployment has been most pronounced, with 23,708 more people, due to the end of the school year. “The loss of jobs affects contracts prior to the entry into force of the labor reform,” says the department of Yolanda Díaz.

Many indefinite contracts, although they fall compared to June

Social Security reports that, “in July, the increase in affiliates with indefinite contracts continues to accelerate, with 1.5 million more affiliates with indefinite contracts than in the years before the pandemic.”

If we look at the number of contracts signed, which corresponds to the Ministry of Labor, it indicates that “in the month of July, 685,992 permanent contracts were registered, a figure that multiplies the historical average by four.”

Many permanent contracts have been signed, many more than in previous years without the labor reform, but their number has decreased compared to the previous months of this year. A new record was broken in June, with more than 780,000 signatures.

In addition, if in what we have been from year to month the indefinite contracts ate ground to the temporary ones, in July, this advance stopped. Permanent contracts accounted for 41.4% of the total, compared to 44% the previous month.