Spain's labour market reached a historic milestone in the second quarter of 2025, as the unemployment rate fell below 10% for the first time since 2008. According to data released by the Spanish National Statistics Institute (INE), the jobless rate stood at 9.87%, down from 11.2% in the previous quarter, as summer hiring drove a surge in employment.
The number of people in work rose by 486,000 between April and June, lifting total employment to a record 22.779 million. At the same time, unemployment fell by 213,300, bringing the total number of jobseekers to just over 2.5 million. The labour force also expanded, growing by 272,700 to a record 25.27 million, reflecting both more people finding work and more entering the job market.
Tourism and services lead the charge
The seasonal boost from the summer months was particularly evident in the services sector, which accounted for the vast majority of new jobs. Tourism, a cornerstone of the Spanish economy, drove much of this growth, especially in coastal regions and the islands. Construction and industry also added workers, while agriculture was the only sector to shed jobs during the period.
Catalonia recorded the largest absolute increase in employment, while the Balearic Islands posted the strongest percentage growth, underscoring the importance of the summer season for regional labour markets. The data aligns with broader trends in Spain's tourism sector, which has seen record visitor numbers in recent years, though concerns about affordability persist, as highlighted in our analysis of Spain's tourism boom masking a holiday affordability crisis for one in three.
Employment growth was concentrated in salaried and full-time positions. Nearly three-quarters of employees now hold permanent contracts, and temporary work continued to shrink, particularly in the private sector. Full-time jobs accounted for 405,400 of the 486,000 new positions created. Private-sector employment rose by 501,600 during the quarter, while public-sector employment fell by 15,600. In seasonally adjusted terms, employment grew by 0.54% from the previous quarter.
The latest figures leave Spain just 221,000 jobs short of the government's target of 23 million people in work by the end of 2026. Economy Minister Carlos Cuerpo set out that milestone in February 2025, based on projected employment growth of around 500,000 people per year. The current pace suggests the target is within reach, provided the economic environment remains stable.
While the data is encouraging, Spain's labour market still faces structural challenges. The country's unemployment rate, though at an 18-year low, remains among the highest in the European Union. Youth unemployment, in particular, continues to be a concern, and the reliance on seasonal tourism jobs raises questions about the sustainability of recent gains. As Europe grapples with mixed results in expat rankings, Spain's improving job market could bolster its appeal for foreign workers, as noted in our report on Europe's mixed results in 2026 expat rankings.
The summer hiring spree has provided a much-needed boost to the Spanish economy, but policymakers will need to focus on diversifying job creation beyond the tourism season to ensure long-term stability. For now, the record employment figures offer a rare piece of good news in a continent facing multiple economic headwinds.
