The October Paradox and Underlying Labor Strength
Spain’s labor market presented a paradoxical picture in October 2025. While typical for this transitional month, the data reveals a structural strength not seen in nearly two decades. Figures released by the Ministry of Inclusion, Social Security, and Migration and the Ministry of Labor and Social Economy paint a two-sided scenario: on one hand, a notable increase in Social Security payrolls, which added an average of 141,926 contributors; on the other, a rise in registered unemployment of 22,101 people.
This apparent contradiction—more people working, but also more people registered as unemployed—is the classic sign of the summer tourism season’s end. However, a deeper analysis of the figures reveals that the underlying trend of the labor market remains solidly positive. The key is not the direction of the change in unemployment, but its magnitude. The increase of 22,101 unemployed individuals is extraordinarily low for an October, a month historically negative for employment.
Specifically, this increase is 65% below the average recorded for this month between 2001 and 2024. The Ministry of Labor itself highlighted that the typical rise is around 62,000 people, making the 2025 figure “three times lower than the historical average.” It is, in fact, the smallest increase in unemployment for an October in 17 years, since 2007.
This phenomenon suggests that Spain’s post-pandemic and post-labor-reform market has significantly tempered its volatility. The economy has developed a much greater capacity to absorb the seasonal shock, avoiding the “traumatic” job destruction that characterized the autumn months in past decades. Total payroll employment remains at a historic high for an October, nearing 21.84 million contributors, while total unemployment stands at its lowest level for this month since the start of the financial crisis.
This report analyzes the October 2025 data in depth. It begins by breaking down the key unemployment and payroll figures, contextualizing them with seasonally-adjusted and year-over-year series to identify the underlying trend. It then dissects the opposing sectoral forces—the engine of education and the brake of hospitality—that explain the month’s performance, as well as the uneven territorial map. Finally, it addresses job quality, the complex and controversial measurement of “effective unemployment,” and the conflicting assessments from the government and business and labor groups, who warn of growing “fatigue” among small businesses and independent contractors.
Summary of Labor Market Indicators (October 2025)
Indicator: Average Social Security Payroll
October 2025 Figure: 21,839,592
Monthly Change (Abs.): +141,926
Monthly Change (%): +0.65%
Year-over-Year Change (Abs.): +507,078
Year-over-Year Change (%): +2.4%
Indicator: Registered Unemployment (SEPE)
October 2025 Figure: 2,443,766
Monthly Change (Abs.): +22,101
Monthly Change (%): +0.91%
Year-over-Year Change (Abs.): -158,288
Year-over-Year Change (%): -6.0%
Indicator: Seasonally-Adjusted Payroll
October 2025 Figure: 21,793,519
Monthly Change (Abs.): +64,569
Monthly Change (%): +0.3%
Year-over-Year Change (Abs.): +505,674
Indicator: Seasonally-Adjusted Unemployment
October 2025 Figure: (Non-numeric data)
Monthly Change (Abs.): -15,256
Analysis of Registered Unemployment: 2007-Lows and a Historic Milestone for Youth
Despite the monthly uptick of 22,101 people, the total number of unemployed individuals registered with the State Public Employment Service (SEPE) stood at 2,443,766. This figure solidifies a very positive underlying trend: it is the lowest total unemployment figure for an October since 2007. With this registry, unemployment in Spain has now remained below the psychological threshold of 2.5 million people for six consecutive months, a milestone not reached since the period before the financial crisis.
To understand the true health of the labor market, it is essential to isolate the structural trend from the seasonal “noise.” The two key indicators for this—the year-over-year variation and the seasonally-adjusted data—are both unequivocally positive.
First, the year-over-year comparison, which measures evolution over the last twelve months, shows a robust reduction in unemployment. In October 2025, there are 158,288 fewer registered unemployed than in October 2024, an intense drop of 6.0%.
Second, the seasonally-adjusted figure, considered the most reliable indicator of the underlying monthly trend, offers the most eloquent reading. In seasonally-adjusted terms, registered unemployment did not rise, but rather fell by 15,256 people. This figure demonstrates that, once the effect of the tourism season’s end is filtered out, the Spanish labor market is still reducing its volume of structural unemployment.
The Youth Unemployment Milestone
Within the unemployment analysis, the most outstanding data point from October 2025 relates to young people. The total number of unemployed individuals under 25 stood at 193,798. Although this is a monthly increase of 10,082—expected given this group’s high turnover at the end of summer—the total stock of youth unemployment marks an all-time low.
According to the Ministry of Labor’s records, the 193,798 registered individuals constitute the lowest youth unemployment figure for an October in the entire historical series. This milestone suggests that the improved contractual stability from the 2021 labor reform is having a particularly positive impact on the integration and retention of younger workers in the labor market.
The Gender Gap in Unemployment
A gender-based analysis shows a balanced increase in unemployment in absolute terms, though the relative incidence was slightly higher among men. Female unemployment rose by 11,561 women, while male unemployment increased by 10,540 men.
The total number of unemployed women stood at 1,480,465, which, like the general total, is the lowest figure for an October since 2007. However, this positive trend does not hide the structural problem of the gender gap in unemployment. Women remain the most visible face of unemployment in Spain: they represent 60.6% of all unemployed individuals (1.48 million out of a total of 2.44 million).
This reality was underscored by trade unions. The Comisiones Obreras (CCOO) union praised the overall solidity of employment but noted that “significant gender gaps persist” and that women continue to represent “six out of every ten people out of work,” urging against “relaxation.”
Analysis of Payroll Employment: A Record Driven by Women and Education
On the job creation side, Social Security payroll data confirms the system’s strength, which is approaching the all-time high reached in the summer. The average number of contributors stood at 21,839,592 people. This marks the second-best October in the entire historical series. The only October that surpassed this figure was in 2021, a year marked by the atypical and extraordinary rebound in hiring during the post-pandemic de-escalation.
The system added 141,926 more employed individuals than in September, a monthly increase of 0.65%. The Ministry of Inclusion noted that daily payroll registries remained above 21.8 million workers on almost every day of the month.
The robustness of the trend is confirmed, once again, by the year-over-year perspective and the seasonally-adjusted data. In the last year, the system has gained 507,078 contributors, a potent year-over-year growth of 2.4%. Meanwhile, the seasonally-adjusted series, which measures the real trend of the month, also set a new all-time high, reaching 21,793,519 contributors after adding a net 64,569.
The Historic Record for Female Employment
The “big news of the month,” in the words of the Minister of Inclusion, Elma Saiz, is the performance of female employment, which was the true engine of job growth in October.
The monthly growth was not at all balanced. While male employment grew by 31,955 workers, female employment soared by 109,972 new contributors. This means women accounted for 77.5% of the entire net increase in payroll employment in October.
Thanks to this surge, the total number of women on the Social Security payroll reached an unprecedented all-time high, reaching 10,344,599 female workers. Women now represent 47.4% of all contributors, approaching parity. According to the Ministry, since the labor reform took effect, female employment has grown by 12.4%, a pace 2.8 percentage points higher than that of men.
Pre-Pandemic Comparison: A Structural Gain of 2.4 Million Jobs
To appreciate the scale of the labor market’s recovery and transformation, it is useful to look back further than just the last year. The current payroll level of 21.84 million contrasts sharply with pre-pandemic figures. At the end of 2019, before the health crisis, the system had 19.4 million contributors.
This implies that in the last five years—a period marked by a global pandemic, a supply chain crisis, a war in Europe, and soaring inflation and interest rates—the Spanish economy has managed to generate approximately 2.4 million net jobs. Furthermore, this growth has been heavily concentrated in high-value-added sectors, such as Information & Communication and Professional, Scientific, & Technical Activities.
The Engine and the Brake: A Snapshot of the Sectoral Divide
The net payroll figure (+141,926) conceals a reality of extreme sectoral polarization. Job growth in October was not widespread; on the contrary, it was the result of two massive, opposing forces that partially neutralized each other: the start of the academic year and the end of the tourism season.
The Engine (Education): The “strong boost” from Education was the decisive factor. This sector alone added 167,323 new members, a spectacular 14.8% monthly increase. This rise, linked to the start of the school and university year, was solely responsible for the aggregate payroll figure ending in positive territory.
The Brake (Hospitality and Health): On the opposite end, Hospitality reflected the end of the high season with the destruction of 50,594 jobs, a monthly drop of 3.08%. This was joined by a significant loss in the Health Care and Social Services sector, which shed 34,341 contributors, likely due to the end of summer substitution contracts.
The analytical conclusion is stark: if the Education sector gained 167,323 jobs, but the total net growth of the system was 141,926, this mathematically implies that the rest of the economy’s sectors, in aggregate, destroyed 25,397 net jobs in October. This perspective completely reframes the triumphant headline figure, which depended exclusively on a single sector.
The analysis of registered unemployment by sector reinforces this view. Unemployment grew, as expected, in the Services sector (+18,496 people), which includes tourism. It also rose in Industry (+1,148) and Agriculture (+1,270).
The only sector to post a positive unemployment figure was Construction, where unemployment fell by 2,121 people.
The Engine and the Brake (Key Sectoral Variation, Payroll and Unemployment)
Sector: TOTAL SYSTEM
Payroll Variation (Monthly): +141,926
Unemployment Variation (Monthly): +22,101
Sector: Education
Payroll Variation (Monthly): +167,323
Unemployment Variation (Monthly): (Included in Services)
Sector: Hospitality
Payroll Variation (Monthly): -50,594
Unemployment Variation (Monthly): (Included in Services)
Sector: Health Activities
Payroll Variation (Monthly): -34,341
Unemployment Variation (Monthly): (Included in Services)
Sector: Services (Total)
Payroll Variation (Monthly): (Data not available)
Unemployment Variation (Monthly): +18,496
Sector: Construction
Payroll Variation (Monthly): +15,347
Unemployment Variation (Monthly): -2,121
Sector: Industry
Payroll Variation (Monthly): +3,865
Unemployment Variation (Monthly): +1,148
Sector: Agriculture
Payroll Variation (Monthly): (Data not available)
Unemployment Variation (Monthly): +1,270
October’s Labor Map: Asymmetrical Growth
The sectoral tension was directly reflected in the geography of employment, with highly uneven performance among autonomous communities. Payrolls grew in 11 regions and fell in the other 6, while unemployment, in a uniform tide, rose in all 17 autonomous communities.
Payroll Snapshot (Winners and Losers):
Payroll growth was concentrated in the large regions, driven mainly by the start of the academic year. The Community of Madrid led job creation with 49,445 new contributors, followed by the Valencian Community (+36,459) and Andalusia (+29,544). Catalonia also posted positive numbers, adding 19,206 contributors and reaching a new all-time high of 3.88 million workers. At the other extreme, the end of the tourism season hit the Balearic Islands hard, which led the declines with a loss of 34,936 contributors.
Unemployment Snapshot (Widespread Rise):
Unlike payrolls, the rise in unemployment was a widespread phenomenon. The largest absolute increases were registered in Castilla y León (+2,545 people), Andalusia (+2,535), and Catalonia (+2,423).
The Regional Disconnect: More Jobs and More Unemployment at the Same Time:
A cross-analysis of both variables reveals one of the most complex dynamics in the Spanish market: the coexistence of strong job creation and a simultaneous rise in unemployment within the same region. The cases of Andalusia and Catalonia are prime examples.
Both communities were in the top 3 for payroll growth and, at the same time, in the top 3 for increases in registered unemployment. This apparent contradiction is explained by high labor turnover and, crucially, the entry of new jobseekers into the market.
The Labor Map (Key Variation by Autonomous Community, October 2025)
Autonomous Community: Community of Madrid
Payroll Variation (Abs.): +49,445
Unemployment Variation (Abs.): +2,281
Autonomous Community: Valencian Community
Payroll Variation (Abs.): +36,459
Unemployment Variation (Abs.): (Data not highlighted)
Autonomous Community: Andalusia
Payroll Variation (Abs.): +29,544
Unemployment Variation (Abs.): +2,535
Autonomous Community: Catalonia
Payroll Variation (Abs.): +19,206
Unemployment Variation (Abs.): +2,423
Autonomous Community: Castilla y León
Payroll Variation (Abs.): (Data not highlighted)
Unemployment Variation (Abs.): +2,545
Autonomous Community: Balearic Islands
Payroll Variation (Abs.): -34,936
Unemployment Variation (Abs.): +1,631
The Debate on Job Quality: Fewer Contracts, but More Stability
An analysis of job quality, measured through hiring, offers a picture of consolidation, albeit with signs of a slowdown in new inflows. During October, 1,510,580 contracts were signed.
Of this total, 643,183 were permanent contracts. This places the permanent contract rate at 42.6% of all new contracts. This percentage solidifies the structural impact of the 2021 labor reform, maintaining the proportion of stability at levels far superior to the 10%-15% common in the pre-reform era.
The stock of employment, therefore, is indisputably more stable. The CCOO union highlighted that, in the last year, payrolls for full-time permanent contracts grew by 310,000 people, while temporary contract payrolls fell by 24,000.
The Fine Print on Permanent Contracts and the Slowdown
However, a more detailed analysis of hiring flows (new contracts signed in the month) reveals important nuances. The composition of the 643,183 new permanent contracts signed in October was: 260,993 full-time, 213,643 permanent-intermittent, and 168,574 part-time.
The main focus is not the snapshot, but the year-over-year comparison. The pace of new permanent contract signings is slowing. In October 2025, 3.16% fewer permanent contracts were signed than in October 2024.
This decline was especially sharp in the permanent-intermittent category, which saw a 6.45% year-over-year decline in new signings. This is significant and suggests that the great shock of transforming temporary contracts into permanent-intermittent ones may be running its course.
The Central Controversy: Registered Unemployment vs. “Effective Unemployment”
One of the most intense and recurring debates in the analysis of Spain’s labor market is the gap between the official registered unemployment figure (the 2.44 million people reported by SEPE) and the concept of “effective unemployment.” This debate has intensified since the labor reform.
Various think tanks and research services have quantified this gap. In October 2025, the difference between registered unemployment and “effective unemployment” (jobseekers without activity) stood at 733,066 people.
To understand this discrepancy, one must analyze SEPE’s own jobseeker statistics. In October, there were a total of 4.23 million registered jobseekers, divided into “Registered Unemployed” (2.44 million) and “Occupied Jobseekers” (1.23 million).
The “occupied jobseekers” category is the source of the controversy. Its volume has grown significantly post-reform because it includes workers with permanent-intermittent (PI) contracts who are in an inactive period.
Before the labor reform, a seasonal worker (e.g., in hospitality) typically had a temporary contract. At the end of the season, their contract was terminated, and they registered as unemployed, adding to the official tally. After the reform, that same worker often now has a permanent-intermittent contract. At the end of the season, their contract is not terminated; they enter an “inactive period.” Legally, they are not counted as ‘registered unemployed’ but as an ‘occupied’ jobseeker, as they have a permanent contract in force.
Therefore, although the official registered unemployment figure is 2.44 million, an additional cohort of at least 733,000 people exists who, while not counted as unemployed, are not working and are seeking employment.
The government has responded to this controversy. The Secretary of State for Labor, Joaquín Pérez Rey, defended the statistical methodology, stressing that “the registered unemployment data is what it is, it has been measured the same way since 1985.” While the methodology has not changed, the composition of the labor market clearly has.
The Unemployment Controversy (October 2025)
Metric (Concept): Total Jobseekers
Figure (Millions): 4.23 M
Metric (Concept): Occupied Jobseekers (Incl. Inactive PI)
Figure (Millions): 1.23 M
Metric (Concept): Registered Unemployment SEPE (Official)
Figure (Millions): 2.44 M
Metric (Concept): Gap (“Effective” Unregistered Unemployment)
Figure (Millions): ~0.73 M
Metric (Concept): Total Permanent-Intermittent (Q3 2025 LFS Data)
Figure (Millions): 0.66 M
The View from Business and Labor: Official Optimism vs. Business “Fatigue”
The October figures have caused a clear fracture in the assessments of different economic and social actors. While the government celebrates historic milestones, business and self-employment organizations are focusing on the underlying weakness of the productive fabric.
The Government’s Assessment (Euphoria)
The administration offered a markedly optimistic reading. The Minister of Inclusion, Elma Saiz, highlighted the “great vigor” of payrolls and called the historic record of more than 10.3 million women working the “big news of the month.” The Ministry of Labor, meanwhile, downplayed the rise in unemployment, calling it “one-third of the usual” and celebrating the 2007-lows.
The Employers’ Assessment (Warning)
Even though net payrolls are growing, this growth is not uniform. The employers’ confederation (CEOE) has identified “signs of fatigue” that are manifesting as a drastic fracture based on company size.
Data from the Ministry of Inclusion reveals that large companies and micro-enterprises are operating in opposite realities. While year-over-year employment at large companies (over 499 employees) is growing at 6.5%, at micro-enterprises (1-2 employees), it is falling by 0.5%.
According to the CEOE, large corporations are “compensating for the fall in employment at micro-enterprises.” This “suffering” of small businesses is attributed to rising costs and a “lack of certainty and legal security.” The association also points to the negative impact of successive hikes in the minimum wage (SMI) in specific sectors, which has caused annual losses of over 12,500 contributors in agriculture and 17,000 in domestic services.
The Self-Employed Assessment (Bittersweet)
The self-employment regime (RETA) also reflects this duality. Although the net balance was positive (+9,142 contributors), this growth conceals a severe crisis in traditional sectors.
Lorenzo Amor, president of the self-employed association ATA, described the situation in retail as a “hemorrhaging.” The most eloquent data point is that, so far in 2025, the retail sector is losing an average of 35 self-employed workers every day. This trend has meant a net loss of over 10,000 self-employed retailers this year.
Amor attributes this decline to a hostile environment for self-employment, citing “more hurdles, more obstacles, more obligations every day.” The growth in RETA is sustained only by the boom in self-employed workers in high-value service sectors (like Education and Professional/Scientific Activities), while traditional sectors (Retail, Hospitality, Industry, and Transport) are shedding self-employed jobs.
The Unions’ Assessment (Positive with Caveats)
Major unions, like CCOO, offered a positive but nuanced view. CCOO values the “solidity” and “improvement in the quality and stability” of employment, attributing them directly to the success of the labor reform. They celebrate the historic milestone of female employment but warn against “relaxation,” recalling that the unemployment gender gap (6 out of 10 unemployed people are women) remains the main outstanding challenge.
A Two-Speed Market
The analysis of the October 2025 labor market data offers a complex conclusion: Spain is moving forward with a two-speed labor market.
On one hand, the macro picture shows figures of undeniable strength. The month closes with a new historic record for working women, the lowest unemployment figure for an October since 2007, and an all-time low for youth unemployment for this month. These milestones demonstrate that the Spanish economy has gained a structural resilience that allows it to absorb the seasonal shock from the end of tourism much better than in the entire previous economic cycle.
On the other hand, this macroeconomic strength masks significant tensions and weaknesses. Aggregate payroll growth this month depended on a single sector (Education) and a single demographic (women). The rest of the economy, in aggregate, shed jobs.
This dynamic reveals the central fracture of the current economic moment: the divergence between the health of large corporations and high-value-added sectors, which continue to grow, and the “suffering” and “fatigue” of micro-enterprises and independent contractors in traditional sectors. The “hemorrhaging” of retail and the job destruction in the smallest companies are warning signs that the robustness of the macro figures cannot hide.
Spain’s labor market, therefore, is holding firm with notable dynamism, but the “signs of fatigue” warned of by employers and the slowdown in the signing of new permanent contracts are the critical variables to watch into the end of 2025. The labor reform has cemented a more stable stock of employment, but the controversy over measuring “effective unemployment” and the fragility of the micro-enterprise are solidifying as its two great remaining challenges.
