2 Jul 2015
Spain: jobless numbers are decreasing fast – ING
FXStreet (Barcelona) - Geoffrey Minne of ING, reviews the Spain labour market data release, noting that the strong labour market trend bodes well for GDP growth.
Key Quotes
“The labour market is performing well as more than 330K people exited from unemployment in 2015 Q2. Even if the monthly decrease of unemployment was lower than expected in June the quarter figure is particularly encouraging.”
“In June, registered unemployment decreased by 94.7K persons (-2,25% MoM) and this figure followed two months of substantial reductions (-119K in Avril and -118K in May). The figure decreased by 7.4% comparing to last year. The decrease in June is mainly led by 3 sectors: -62K in services, -12K in construction sector, -14K in industrial sector. The only item that is particularly encouraging is the high decrease of youth unemployment (-26K and -7,09% MoM). Knowing that youth unemployment rate is close to 50%, the specific political measures and targeted labour policies implemented by the government.”
“One should also bear in mind that the seasonal effect remains particularly important in a country. Seasonal jobs are common and it creates a figure exceeding the annual average. In May, for instance, only 8% of the contracts were about open-ended jobs. Many workers then entered in the labour market but only on a temporary basis.”
“Having said that, we saw during the last months that the labour market pursued its strong development and it suggests that GDP growth should follow this trend. We then expect the GDP to grow in Q2 2015 at a similar pace to Q1 2015 and to be around 1% QoQ.”
Key Quotes
“The labour market is performing well as more than 330K people exited from unemployment in 2015 Q2. Even if the monthly decrease of unemployment was lower than expected in June the quarter figure is particularly encouraging.”
“In June, registered unemployment decreased by 94.7K persons (-2,25% MoM) and this figure followed two months of substantial reductions (-119K in Avril and -118K in May). The figure decreased by 7.4% comparing to last year. The decrease in June is mainly led by 3 sectors: -62K in services, -12K in construction sector, -14K in industrial sector. The only item that is particularly encouraging is the high decrease of youth unemployment (-26K and -7,09% MoM). Knowing that youth unemployment rate is close to 50%, the specific political measures and targeted labour policies implemented by the government.”
“One should also bear in mind that the seasonal effect remains particularly important in a country. Seasonal jobs are common and it creates a figure exceeding the annual average. In May, for instance, only 8% of the contracts were about open-ended jobs. Many workers then entered in the labour market but only on a temporary basis.”
“Having said that, we saw during the last months that the labour market pursued its strong development and it suggests that GDP growth should follow this trend. We then expect the GDP to grow in Q2 2015 at a similar pace to Q1 2015 and to be around 1% QoQ.”