Spain Adds 118K Jobs as Labour Strength Endures

Spain’s labour market continued to demonstrate remarkable resilience in the third quarter, with total employment rising by 118,400 quarter-on-quarter and 564,100 year-on-year, according to the National Statistics Institute’s (INE) Labour Force Survey (EPA). Job creation remained broad-based across services, manufacturing, and construction, reflecting sustained domestic demand despite weaker external conditions.

The unemployment rate edged down to 11.2%, its lowest level since 2008, underscoring the depth of post-pandemic recovery in labour absorption. The participation rate climbed to 59.8%, suggesting renewed workforce engagement, particularly among younger and female cohorts. The government projects joblessness to average 10.9% in 2025 alongside GDP growth near 1.7%, buoyed by fiscal prudence and selective investment support.

Economists attribute Spain’s resilience to diversified exports, disciplined fiscal management, and improved public balance sheets, even as EU recovery funds begin to taper. Service-sector hiring in tourism, logistics, and digital services remains the main growth driver, while industrial employment has stabilised after previous declines. Construction maintained momentum, aided by residential demand and infrastructure upgrades.

Financial indicators remain steady: Spanish 10-year government bond yields (BONO10Y) held around 3.32%, signalling market confidence in fiscal sustainability, while the IBEX 35 index rose 0.5% on improved earnings outlooks. However, analysts warn that productivity gains and wage discipline will be vital to maintaining competitiveness as inflation moderates and EU policy support fades.

Spain’s consistent job growth, coupled with restrained fiscal policy, positions it as one of the Eurozone’s labour-market bright spots heading into 2026, though challenges persist in aligning wages with productivity and sustaining momentum amid global deceleration.