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In this edition of the QLMO, we assess recent labour market developments using the information available through Q1 2026. We review the main aggregate indicators and explore a number of issues related to working conditions, immigration, and youth emancipation.

The Spanish economy continues to grow faster than the euro area, driven by strong employment, services, and domestic demand. However, structural challenges remain in productivity, investment, and housing that must be overcome to achieve real convergence with Europe.

Labor participation has rebounded since 2020, driven by cyclical factors, immigration, and higher educational levels. However, this improvement is temporary and masks the structural trend resulting from population aging.

Since the pandemic, Spain’s labour force participation rate has risen by 1.6 percentage points, reaching 59% of the working-age population in 2025. While the underlying trend is structural, most of the increase since 2020 reflects cyclical factors.

Spain is experiencing record employment growth that contrasts with the stagnation of wage purchasing power. This situation is explained by an economic model based on the accumulation of jobs rather than improvements in productivity, compounded by a higher tax burden on labor.

In February 2026, the national unemployment rate stood at 9.2%, below the 10.3% recorded a year ago. The annual reduction of 1.1 p.p. was mainly due to the increase in the occupation rate, which was accompanied by dynamic employment growth (2.7%).

In January 2026, the national unemployment rate decreased to 10.9%, reaching its lowest level for this month since 2001. However, job creation experienced a deceleration, with an annual growth of 1.4%.