The labor market hits the brakes in January and more than 215,000 jobs are destroyed

The surprising verve that the Spanish labor market maintained in 2022, with growth rates of even more than 5% despite the war in Ukraine and the escalation of prices, came to an end and this rate of progress has been reduced by almost half in just one year. The symptoms of weakness that were already perceived in December -with a much lower number of affiliates than usual- are accentuated and become visible in 2023, which already begins with a marked slowdown. In January, more than 215,047 members were lost and 70,744 more unemployed were added, according to data published this Thursday by the Labor and Social Security ministries.

It is true that January is a month that usually leaves bad news for the labor market due to the end of the Christmas campaign, but it is also true that with the exception of 2020 and 2021, we have to go back to 2013, in the midst of the Great Recession, to overcome this bad fact.

In addition, the slowdown in the Spanish labor market is evidenced by the fact that the rate of job creation has fallen from 4.2% to 2.3% in the last twelve months. This is the worst level since March 2021 and is also well below the percentages registered during the economic recovery period from 2015 to 2019.

Social Security thus falls back below the barrier of 20.1 million affiliates nine months after exceeding it and moves away from that maximum of 20.3 million achieved in summer to stand at 20,081,224. In seasonally adjusted terms, however, it does border on 20.3 million contributors after adding 57,726 in January, although the slowdown is also perceived.

However, from the Government they rule out that it is a slowdown and even speak of a “frankly good” January. “We have started the year well. Once again we continue with a very solid, very strong job market, which is enduring uncertainty very well,” Social Security Minister José Luis Escrivá told RNE. Along these lines, the second vice president, Yolanda Díaz, praised the greater stability that exists after the labor reform and a labor market that “is now more robust and better resists in times of crisis.”

The destruction of employment this month of January has been practically generalized in all sectors and, above all, it has been registered in all territories without exception. Thus, all the autonomous communities have suffered a drop in affiliation at the beginning of the year, with Catalonia and Valencia at the forefront, but, in addition, there is not a single province that is saved from this loss of employed.

Similarly, there is only one sector of economic activity in which employment has grown: energy supply, although with a minimum increase of 239 contributors. All the others register losses, but the largest are concentrated in commerce (-46,000), hospitality (-45,000) and auxiliary services (-42,000).

600,000 fixed without employment

The behavior of unemployment can also be classified as negative: the fall of more than 70,000 unemployed in January is much higher than last year and, although it is in line with previous years, it should have been at least lower, since with the entry In force of the labor reform there is a flood of workers with a discontinuous permanent contract who have ceased to appear as unemployed at this time of the year despite having ceased their activity, a situation that could affect some 600,000 people. The total number of unemployed is already above 2.9 million. But not only that, but there are more than 4.5 million job seekers, that is, 1.6 million people are looking for work but are not registered as unemployed.

But there are also reasons for optimism. Temporary employment, one of the great ballasts that the Spanish labor market had dragged down for decades, has been reduced by half one year and one month after the entry into force of the labor reform. If before the new standard it exceeded 30% on average, in January it has fallen to 15%, which is already close to European levels. And the rate of eventuality in those under 30 years of age has even been reduced by more than half, going from 53% to 23%, 30 points less.

Along these lines, there are 2.3 million more members with an indefinite contract now than in December 2021, the last month before the reform came into force.

The trend towards the stabilization of employment can also be seen in the total number of contracts registered during the month of January: one million less have been signed and 44% of the more than 1,200,749 signed were permanent.