There is no doubt that unemployment data for the month of October have positively surprised our own and strangers, I believe that few analysts expected such an encouraging result as that which has occurred, especially after the results known in the third EPA (Population Survey Activa) that was announced a few days ago. In addition to improving 2017 data on unemployment (just over 52 thousand new unemployed, compared to more than 56 thousand the year before), has improved the data that is more important: the Social Security affiliate that adds more of 130 thousand new affiliations, bordering the 19 million contributors.
The number of unemployed has remained at 3,254,703 unemployed. From the data received, we must highlight some very relevant aspects: we have achieved the best number of indefinite contracts in history for this month, improving the figures by 19.6% compared to 2017 (it seems that the dissuasive letters sent by the Labor Inspection continue to have effect); employment data has worsened in almost all sectors, except for construction, which continues to recover positions little by little; the youth unemployment of under-25s has worsened and perhaps the most striking fact, of those known today, has been the extraordinary behavior of education, which added more than 148 thousand new affiliations, a fact that despite being very positive, It highlights the abuse of temporary employment, discharging teachers in July and registering them again in October.
As stated in the headline, it seems that it is very far (although only five years have passed) that October 2013, where we exceeded the six million unemployed enrolled in the State Public Employment Service, reaching 26% of the active population. Undoubtedly, companies and workers have made great sacrifices and efforts so that by the same dates of 2018 we have been able to reduce unemployment to 3.2 million, leaving the rate below 15%, no less than 11 points less.
As we already know, Spain habitually carries out the adjustment of the economic cycles destroying or creating jobs, hence we lose employment and we believe them at the speed that no other country is capable of doing so.
We are in an economic moment in which we should not launch the campaigns to flight, in which although we are still maintaining a growth of 2.5% of GDP, chaining more than 20 consecutive quarters of growth, exports have begun to recede by the first time since 2013 (partly due, among other things, to protectionist policies and the cooling of the euro zone) and what is really causing us to grow is mainly domestic consumption, a consumption that despite being at minimum levels saving families and high inflation with stagnant wages, with the consequent loss of purchasing power, keeps pulling our economy, everything indicates that not for long, but for now it keeps pushing.
Another aspect that is subjecting our economy and therefore our employment is the Public Administration (in the last EPA 30% of the jobs created were within the public sphere), in the last quarter the expenditure increased by 0.8%, to 0.1% in the previous quarter, it is a fact that we have to monitor since with the current levels of indebtedness and commitment of deficit this is not sustainable in the long term.
When the current government entered the Moncloa, we had 3.16 million unemployed, we closed the month of October with 3.25 million, although it is part of the normal cycle of employment, we must not lose focus and of course not continue to send messages that create instability and uncertainty. In relation to these messages there are two that have really generated concern in Spanish companies: the rise in the minimum wage on the one hand and, on the other, the increase in Social Security contributions for the highest salaries. We have heard very authoritative voices discouraging both in times of instability such as we are, the Government should not rely on these data and should pay attention to these voices and avoid maneuvers that we may regret in the short term.
* Carlos Martínez, president of IMF Business School