The Spanish labor market showed significant improvement in April, coinciding with the Easter celebrations and following a period of heavy rainfall that negatively impacted the hospitality sector.

Recent data indicates that the average affiliation to the Social Security system increased by 1.08% compared to the previous month, resulting in an addition of 230,993 registered members, a growth that extended across all sectors.

Comparing this year's April figures to those of the previous year, the growth surpassed last year's monthly increase of 0.95%, primarily due to the holiday period occurring in March this year.

The Ministry of Inclusion, Social Security, and Migration also reported a 0.32% monthly increase in seasonally adjusted series, up from 0.22% in the same month last year.

Further months will clarify whether this trend marks a temporary surge or a more lasting increase in employment creation.

In correlation with the robust job creation, unemployment dropped by 2.61% compared to March, translating to 67,420 fewer individuals registered as unemployed at the State Public Employment Service (SEPE).

This decrease is notably more favorable than the previous year's decline of 2.22% in April.

In total, April saw an average of 21,588,639 affiliations to the Social Security system, the highest figure on record, reflecting a year-on-year growth of 2.31%.

The number of unemployed individuals decreased to 2,512,718, marking an annual reduction of 5.77%, the lowest number since July 2008. The decline in unemployment consolidates a start to the year characterized by faster decreases than those seen in the previous year.

This commencement of the second quarter appears as a positive leading indicator for GDP growth in the second quarter, following a first quarter growth rate of 0.6%, lower than in previous periods.

The hospitality sector has notably benefited from the onset of the tourist season, displaying a marked increase in employment after months of low activity.

Almost half (48.5%) of the new registrations pertained to the hospitality sector, which encompasses jobs in restaurants and accommodations.

Specifically, hospitality experienced a monthly growth of 108,513 in the general scheme and 3,475 among self-employed workers.

The commerce sector followed as the second largest contributor with 15,677 new registrations in the general scheme and 1,976 among the self-employed.

It is vital to highlight that this favorable performance in April for both sectors derives partly from seasonal effects, as there is a continual decline in small shops and local restaurants, resulting in a shift from these smaller entities to larger employers.

On an annual basis, among self-employed workers, the sectors showing the best performance included professional, scientific, and technical activities, with a gain of 14,734 average registrations, as well as information and communications with 7,970 new registrations.

For the general scheme, transportation and communications led growth with an additional 62,313 registrations, followed by health services and social work with 58,533, and education with an increase of 52,961.

Additionally, the employment growth in April brought the total number of average affiliations among foreign workers to nearly three million, reaching a historic high of 2,983,461.

Foreign nationals accounted for 32.9% of the monthly affiliation gain in April, a figure slightly lower than the same period last year.

The most significant drop in unemployment compared to March occurred in the services sector (-49,660 individuals), as well as in construction (-3,817), agriculture (-3,323), industry (-2,920), and among individuals with no previous employment (-7,700).

Since the implementation of labor reforms that limited temporary hiring, over four million additional workers now hold permanent contracts, marking a 36.7% increase since 2022. The number of discontinuous permanent workers remains stable at 5.8% of the total, and the proportion of temporary workers is under 12% (11.9%), while this percentage averaged 29.5% from 2017 to 2021.

Overall analyses suggest that job turnover has decreased; however, permanent contracts are no longer as stable as they were prior to the reforms, as companies exhibit some degree of temporary employment through layoffs and trial periods.