Labour market

In the third quarter of 2019, labour input in hours worked, increased both on a quarterly basis (+0.4%) and in trend terms (+0.5%). Employment remained almost unchanged compared with the previous quarter, in a context of falling unemployment and inactivity. These labour market dynamics are part of a phase of quasi-stagnation of economic activity confirmed, in the last quarter, by a 0.1 economic change in GDP.

On the labor supply side, in the third quarter of 2019 the number of people employed remained substantially unchanged in trend terms, as a result of an increase in employees – especially fixed-term employees – and the fall in the self-employed. The employment rate rose to 59.2% (+0.1 points). In the most recent monthly data (October 2019), net of seasonal effect, the employment rate and the number of employees showed an increase over the previous month.

The year-on-year trend showed a constant growth in the number of employed persons (+ 0.6%, +151 thousand in one year), especially of permanent employees, against a decline in fixed-term and self-employed persons; the ratio of fixed-term employees to total employees dropped to 17.6% (-0.3 points in a year). After the slowdown in growth over the last three quarters, full-time employees began to decline again, while the increase in part-time employement continued; the ratio of involuntary part-time to total part-time workers was stable at 64.0%. In the third quarter of 2019, employment and the related rate strated growing again among young people aged 15-34 years, both in trend and economic terms.

In the trend comparison, the number of unemployed continued to decline, albeit at a slower pace, for the tenth consecutive quarter (-61 thousand in one year, -2.5%), involving only individuals looking for their first job against a slight increase in the number of people with a previous work experience. After the increase in the last quarter, the number of inactive people aged 15-64 began to decrease again (-199 thousand in one year, -1.5%).

The unemployment rate decreased both compared to the previous quarter and to the previous year; this trend was accompanied by short term stability and a downward trend in the inactivity rate of people aged 15-64. In the monthly data for October 2019, the unemployment rate decreased compared to September 2019, and that of inactivity showed a slight increase.

In the flow data – after 12 months – permanence in employment increased, especially among women, and mostly among young people aged 15-34. Among fixed-term employees, a longerpermanence in employment wasdue to the considerable increase intransitions to permanent contracts (+9.5 points).

On the business side, the growth in labour demand continued, with a 0.5% increase in employee jobs over the previous quarter (+1.6% on an annual basis), resulting from the growth in both industry and services. Besides the increase in employee jobs, there was an increase of hours worked per employee on a quarterly basis (0.2%) and a decrease year-over-year (-0.4%). In addition, the use of short-time working allowances grew up. The job vacancy rate remained unchanged compared with both the previous quarter and the same quarter of the previous year. Labour cost increased by 0.1% compared to the previous quarter and by 1.8% compared to the same quarter of the previous year, as a result of an increase in wages by 0.1% over the previous quarter and by 1.4% on an annual basis, and a decrease in social security contributions by 0.1% on a quarterly basis, accompanied by a 3% increase on an annual basis.