Spain | Quarterly Labor Market Observatory 2Q2025

Summary

This edition of the QLMO analyzes labor market trends using data available through Q2 2025. It reviews the performance of key aggregate indicators and explores recent developments in the duration of employment relationships.

Key points

• Key points:
• Job creation ranged between 0.6% quarter-on-quarter (seasonally and calendar-adjusted) based on Social Security registrations, and 0.8% according to the preliminary estimate of the Quarterly National Accounts. Data from July and August point to a slowdown in employment growth in Q3 (0.4% QoQ, seasonally and calendar-adjusted). Unlike the pattern observed since early 2022, the increase in employment was largely driven by the Spanish population, while foreign nationals continued to account for most of the recovery in labor force participation.
• Job creation and a decline in involuntary part-time work contributed to reducing labor underutilization and the incidence of long-term unemployment.
• Since 2020, total hiring has fallen by 31.5%, mainly due to a decline in employment episodes linked to restarted employment relationships (RERs), whether through rehires or callbacks.
• Fewer than 40% of employment relationships initiated (ERIs) under intermittent permanent contracts are resumed through a callback within a 400-day window.
• The average cumulative duration of ERIs and RERs 365 days after initial registration has increased compared to 2021 (by 2 days). This shift reflects a composition effect: the decline in temporary hiring (which typically has shorter durations) offset the decrease in the duration of relationships initiated under standard permanent contracts (-72 days) and intermittent permanent contracts (-108 days).

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