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The COVID-19 health crisis has led to a steep fall in economic activity and employment. The recovery of the labor market will depend on how firms adapt to the new normal, the adjustment of global value chains, changing consumer preferences, and the effects of automation and digitalization.
With 2.5M jobs being added and the unemployment rate declining 1.4pp to 13.3% in May, it seems fair to assume that the economy has reached bottom and the recovery is underway.
The pace of job creation slowed further in January with an annual rate of 1.6%. Only 69K formal jobs were created in the private sector in January. The real wage continues with a good performance and grows 3.1% YoY.
As predicted, the deceleration of formal employment has been persistent practically throughout the year, in November it grew 1.7% YoY, the lower level since the crisis of 2009. From January to November 724 thousand jobs have been created.
In this Watch, the structural factors that allow us to explain the cyclical behavior of the Spanish economy during the first half of 2019 are evaluated, and the impact of the main changes affecting GDP.
The public pension system is a basic pillar of the welfare state. The Spanish system is perfectly viable and sustainable, provided that it adapts to ongoing economic, social and demographic changes in Spanish society.
Now that the economic slowdown in Spain looks to be giving way to GDP growth (forecast to be between 1.5% and 1.8% by 2020), discussion has turned to employment creation in the coming quarters.
Formal employment had an annual growth of 1.9%, reaching a total of 20.5 million formal employees.