Who to believe?
THE EURO ZONE ·
Analysing and interpreting statistics is never a black-and-white affairMark Nayler
Friday, 4 November 2022, 14:16
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THE EURO ZONE ·
Analysing and interpreting statistics is never a black-and-white affairMark Nayler
Friday, 4 November 2022, 14:16
The mercurial nature of Spain's labour market was highlighted again at the end of October, when it emerged that fewer jobs were created in the third quarter of 2022 than in the same quarters of 2021 and 2020. It's the comparison with the 2020 that's really surprising, as that summer there were still lots of Covid-induced restrictions on movement and economic activity in place.
The latest statistics are even more unexpected when you bear in mind that Q3 spans what's usually a boom period for Spain's labour market, encompassing as it does the months of July, August and September (over half of the 70,000 new jobs created in Q3 this year were in the Balearic Islands). Overall unemployment, though, actually crept up during that period, albeit microscopically from 12.48% to 12.67%. Look at these figures along with cost-of-living protests in Madrid last weekend, downgraded economic forecasts and predictions of impending recession and it all looks terribly hopeless and bleak.
As always in such situations, though, statistics need balancing and doom-mongering requires analysis. If you're wondering what happened to labour minister Yolanda Diaz's long-overdue assault on Spain's temporary contract culture - well, it's still bearing fruit: over 444,000 permanent contracts were signed during the third quarter of 2022. In May, the number of permanent contracts had risen 218% compared to the same month in 2021, from 784,000 to 2.5 million.
May also saw the number of jobseekers in Spain fall below three million for the first time since the start of the global financial crisis in 2008. And overall unemployment, despite the slight uptick in Q3, remains almost two percentage points lower than it was during the third quarter of 2021. It's not all bad, then.
If there's a Spanish politician you can rely on to be boundlessly, even suspiciously, optimistic, it's economy minister Nadia Calvino. She was at it again in a TV interview last week: when asked if she thought the country was headed for recession (technically defined as two consecutive quarters of GDP contraction), Calvino replied, "Indicators are not pointing in that direction". One of the indicators to which she referred, though, was the rate of job creation. Still, she must know what she's talking about... Right?
Non-governmental organisations aren't as optimistic. Both Airef, the country's fiscal watchdog, and investment bank ING predict that Spain will enter a technical recession in the last quarter of this year and the first of 2023. ING also forecasts a steady increase in Spain's unemployment rate over the next year, topping out at 14.3% in Q3 2023 - i.e. almost back to where it was during the same period in 2021. So it's really a question of who you believe - the independent economists or the relentlessly rosy Calvino.
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