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Jobless claims fall almost 100,000 in the best month of May since 1997

But almost all of the new hiring is on a temporary basis ahead of main tourist season

Number of new permanent contracts at 16-year low

There were two sides to the latest jobless claim figures. On the one hand, the labor market enjoyed its best May in 16 years as firms geared up for the tourist high-season by taking on more staff. On the other hand, over a year after the Popular Party government introduced reforms aimed at eliminating the duality of the labor market, the number of employees granted permanent contracts was at the lowest level also in 16 years.

According to figures released Tuesday by the Labor Ministry, the number of people officially registered as out of work fell by 98,265 last month, or 1.97 percent from April, to 4.890 million, the best showing in May since 1997, when the statistical series began. Registered unemployment has now fallen for three months in a row. May is normally a good month for the labor market, with an average fall in jobless claims of 54,000 over the past 15 years.

The ministry said the annual increase in the number of people out of worth had fallen from nine percentage points a year ago to 3.75 percent. “The destruction of employment has been slowing since May of last year,” the secretary of state for employment, Engracia Hidalgo said.

The number of people signed up with the Social Security system also increased by 134,660 to 16.37 million and has risen by 216,265 over the past three months.

Unemployment fell across the board. The biggest fall in jobless claims was in services, where the figure fell by 61,336, principally as a result of increased hiring in the hostelry sector. Registered unemployment also fell in agriculture at the start of the harvest period. The number of people out of work also fell across the country, with the exception of the Canary Islands, where jobless claims rose by 538.

The biggest fall was in services, where the claims figure fell by 61,336

Prime Minister Mariano Rajoy described the figures as “encouraging.”

The other side of the coin was that only 7.49 percent of the work contracts signed in May were permanent ones, the lowest figure since 1997. The number of permanent contracts declined 2.5 percent from April and 24 percent from a year earlier to 95,856 contracts, while the number of temporary contracts rose by 12.5 percent from the previous month and by an annual six percent to 1.28 million.

The ratio of those registered as unemployed and entitled to unemployment benefits declined to 61.3 percent in April from 65.6 percent in the same month a year earlier.

According to the National Statistics Institute’s Active Population Survey (EPA) for the period January-March, the number of people out of work reached 6.202 million as the unemployment rate jumped to 27.16 percent at the start of this year. The difference between registered unemployment and the EPA figure can be largely explained by the fact that many jobless individuals do not sign on as such at labor offices as they would not be entitled to any subsidies.