Spain Continues to Drive Eurozone Job Growth Amidst Record Employment Figures

Spain's Employment Reaches Historic Levels

Spain's labor market has demonstrated remarkable dynamism, with the number of employed persons reaching a historic high of 22.39 million in the third quarter of 2025. This represents an addition of 118,400 new jobs during the quarter, according to data released by the National Statistics Institute (INE). The employment rate also saw an increase, rising to 53.10 percent in Q3 2025 from 52.96 percent in the preceding quarter.

Earlier in the second quarter of 2025, employment had surged by 503,300 from the previous quarter, bringing the total to 22.27 million people, the highest figure since records began. This robust job creation underscores Spain's sustained economic expansion, with the Economy Ministry affirming the 'dynamism of the labor market'.

Unemployment Rises Marginally Despite Job Gains

Despite the significant increase in employment, Spain's unemployment rate experienced a marginal rise to 10.45 percent in the third quarter of 2025, up from 10.29 percent in the second quarter. This uptick is primarily attributed to a larger workforce, with more individuals actively seeking employment. The number of unemployed persons increased by 60,100, reaching 2.61 million. However, the Q2 2025 unemployment rate of 10.29 percent marked the lowest level since the 2008 global financial crisis.

Key Drivers of Spanish Job Creation

Several factors have contributed to Spain's impressive job growth:

• Private Sector and Services: Job creation has been predominantly driven by the private sector, with significant gains across industry, services, and construction. The service sector alone was responsible for creating 364,800 jobs in Q2 2025, accounting for nearly 70 percent of all new positions. The booming tourism industry is a particularly strong contributor.
• Immigration: Non-national workers have played a crucial role, with their active population surging by 36.1 percent since Q4 2019. Nearly 90 percent of new jobs were filled by workers of foreign origin or dual nationality, boosting domestic demand and rejuvenating the workforce.
• Economic Reforms: Legislative changes have led to a reduction in the temporary employment rate, which fell to 15.5 percent in Q2 2025, down from 18.2 percent in Q4 2022, favoring full-time roles. Additionally, labor reforms, including increases in the minimum wage, have put more money into the pockets of low-income consumers.

Spain's Impact on Eurozone Employment

Spain's robust performance positions it as a key engine for employment growth within the Eurozone. While the Euro Area as a whole saw employment increase by 0.1 percent in Q2 2025, marking its 17th consecutive period of growth, Spain's contribution stands out. In Q1 2025, Spain recorded one of the highest employment growth rates in the Euro Area at 0.8 percent, alongside Croatia. In Q2 2025, Spain's 0.7 percent growth in employment was the highest among the largest Eurozone economies, offsetting decreases observed in Germany and Italy. The European Commission forecasts Spain's GDP to grow by 2.5 percent in 2025, significantly higher than the projected 0.9 percent for the Euro Area.