Membership data to the Social Security In September, despite being relatively better than those registered in the previous two months, they continue to delve into the idea that the Spanish labor market is immersed in a phase of slowdown, far from the dynamism recorded in the previous years. In that month, the interannual growth of the affiliation stood at 2.44%, lower than the 2.86% recorded on average in the first quarter of the year or 2.95% in April. The correction may seem moderate but there are other more negative readings.
To assess the extent to which the pace of Social Security affiliation is slowing down, focus must be placed on the evolution of quarterly rates, corrected for seasonality and calendar effect. In response to these rates, in the third quarter of the year membership increased by 0.27%, well below the 0.68% recorded in the first two quarters of the year. That is, the growth rate of affiliation has been reduced to less than half. This fact is best visualized if we annualize the growth rates. Thus, in the third quarter the membership would be growing 1.1% in annualized rate, while in the first half of the year it was at a rate of 2.73%. These figures mean an impressive trend change. But if we analyze them in more detail, it could be concluded that the deterioration of the labor market, both quantitatively and qualitatively, is even more significant. From the quantitative side, Social Security affiliation data, as an indicator of the evolution of the occupation, have been disfigured by the entry into force as of April 1, 2019 of decree law by which the State went on to assume Social Security contributions of non-professional caregivers. As a consequence, since April the affiliation of this group has multiplied by more than five, an increase that does not reflect a real increase in employment or economic activity.
Discounting the positive effect on the affiliation of non-professional caregivers, an effect that is transitory, the third quarter membership would grow from 0.27% to 0.16%. Translating this growth into annual terms means that employment in the third quarter in the third quarter has not grown to 1.1% as noted above but to 0.64% year-on-year. Given that in the first half of the year the annualized growth was 2.73%, affiliation has slowed dramatically in the third quarter of the year, much more than what Social Security affiliation statistics initially show.
From a qualitative point of view, in the third quarter of the year the affiliation, without correcting of seasonality and calendar effect, registered practically zero quarterly growth, the lowest rate in this period since 2012. This variation is explained by a moderate growth of public sector affiliation and, most importantly, a contraction of private sector affiliation, in a quarter where traditionally in the private sector work is created. Hopefully this slowdown is temporary and we don't have to revise the growth forecasts further down. In any case, the institutions that last May revised their forecasts upwards for the good employment data for the first quarter should at least update their analysis.
Antonio Merino is an economist and commercial technician of the State