The unemployment rate in August was the highest since 2019. Photo credit: rawpixle.com/freepik
The Spanish labor market was a huge hit in August, cutting 199,300 jobs in what is said to be the worst employment in August since 2019. However, despite a sharp decline in social security registrations, unemployment rates remained unusually low during this period, hovering at the lowest level in August since 2007.
Spanish Minister Dellavajo (Ministry of Labor) confirmed that the number of people registered as unemployed increased by 21,905 that month, an increase of less than 1%, bringing the total to just over 2.422 billion. This rise marks the third consecutive month’s rise, but the overall level of unemployment is far below where it existed 10 years ago. Compared to August 2024, the total number of people fell by more than 145,000, representing 5.7% year-on-year. The education sector felt the biggest contraction, losing almost 76,000 jobs as contracts tied to the grade expired. Management and auxiliary services eliminated more than 19,000 positions, more than 16,000 artistic and recreational activities, and construction contracted 15,500. Agriculture and domestic chores also declined, continuing long-term patterns of job losses in these areas. The only bright spots were due to health and administration, which remained widespread and stable.
Despite the losses, Spain has historically maintained a large number of contributors to the Segridad society (social security system), with 21.67 million people working at the end of August. When the seasonal effects were stripped away, employment actually increased nearly 30,000 compared to July. For the first eight months of 2025, the labor market has created over 300,000 jobs and nearly half a million in the last 12 months.
This resilience reflects changes in the Spanish labor framework in recent years. Reforms have reduced control of temporary contracts, particularly in the private sector, encouraging more permanent employment forms. As a result, seasonal swings remain large and heavy in sectors such as tourism, entertainment and education, but the overall structure of the workforce is not vulnerable to sudden fluctuations.
August is almost always a difficult month for employment, as the peak of the summer tourist season approaches its end, schools and universities close and construction activities slow. However, this year, the 199,300 jobs have been particularly severe, surpassing the falls recorded in both 2023 and 2024, already close to 190,000. Analysts point out that the size of the workforce earlier this year will make the decline starker as larger employment locations naturally produce larger monthly corrections. Still, the fact that unemployment remains at its August low in 18 years is considered a sign of strength. In contrast to previous recessions, when job destruction was accompanied by rising unemployment, this year’s figures suggest that many workers are moving between contracts or sectors rather than leaving the labour market for good.
Looking ahead, economists hope that employment levels will recover in September, a result of new contracts for education, health and administration. Still, the August data highlights the continued exposure to seasonal pressures in Spain, highlighting the challenge of building a labor market that can maintain stability throughout the year.
