Spain’s labor market Q1 2026: By the Numbers

Spain’s job market started 2026 with a familiar seasonal shift, but the latest figures show a slightly sharper cooling than usual.

• Unemployment rate: 10.8% (up from 9.9% last quarter)

• Seasonally adjusted unemployment: 10.3% (slightly lower than Q4)

• Jobs added over past year: +528,000

• Labor force growth: +61,000 in the quarter

• Temporary employment rate: 14.8%, continuing a gradual decline

• Total employed: 22,463,300 workers

On paper, unemployment rose. In practice, the underlying trend is still one of job growth, just at a slower pace than late 2025.

Unemployment in Spain climbs, but follows a familiar pattern

Spain’s unemployment rate rose to 10.8% in the first quarter of 2026, according to CaixaBank Research, up from 9.9% in the previous quarter.

That jump looks sharp at first glance, but it aligns with a pattern seen almost every year: the end of holiday-season hiring and temporary contracts leads to a predictable drop in employment at the start of the year.

What makes this quarter slightly different is the scale. The decline in employment, at 0.8%, was a bit higher than the long-term average for first quarters. That reflects a mix of factors, including unusually strong hiring at the end of 2025 and disruptions linked to heavy rains in February.

Still, the broader picture is more stable than the headline suggests. When seasonal effects are stripped out, employment actually increased 0.4% from the previous quarter, and remains up 2.4% compared with a year earlier.

Employment holds near record levels despite quarterly dip

Even after the seasonal slowdown, Spain is still sitting on historically high employment levels at more than 22.4 million workers. The quarterly drop mainly reflects timing rather than a reversal in hiring. Many temporary roles tied to tourism, retail, and year-end demand simply expired, which is typical for the first quarter.

Over the past 12 months, the labor market has still added more than half a million jobs. That pace is slower than the strongest post-pandemic recovery phases, but it continues to point to steady expansion rather than contraction.

More people entering the workforce keeps pressure on unemployment

One reason unemployment rose even as underlying job growth remained positive is simple: more people are entering the labor force. The active population increased by 61,000 in the quarter, and by 1.8% over the past year. That steady inflow means job creation needs to stay strong just to keep unemployment stable.

Population growth is also adding to the pool of potential workers, rising about 1% year over year. This helps explain why unemployment can rise even when employment is still growing on a yearly basis.

Services weaken, while industry and construction stay strong

The latest data shows a clear split across sectors:

In services, which is typically the largest and most sensitive to seasonal shifts, saw a 1.3% quarterly decline. That is where most of the employment drop came from.

Construction continued to expand strongly year over year. Meanwhile, agriculture grew more slowly but remained positive.

This pattern matters because services tend to swing quickly with tourism cycles and calendar effects, while industry and construction usually reflect more sustained investment trends.

Public sector hiring continues to support overall job growth

One notable feature of the past year is the growing role of public employment. Roughly 31% of all net jobs created over the last 12 months came from the public sector, a much larger share than earlier in 2025.

That shift helps smooth out volatility in private-sector hiring, especially during periods like Q1 when seasonal jobs unwind.

What comes next for Spain’s job market

CaixaBank Research expects employment growth of around 2.3% in 2026, slightly slower than last year but still consistent with a growing economy. Unemployment is expected to gradually move back toward levels below 10% if current trends hold, supported by steady hiring and moderate economic expansion.

The main uncertainty is whether energy price shocks or geopolitical disruptions could slow hiring, especially in sectors sensitive to input costs. For now, the labor market is still expanding, albeit at a more measured pace after a very strong finish to 2025.