"Adaptability of a living being in the face of a disturbing agent or an adverse state or situation". The Royal Spanish Academy (RAE) defines "resilience" as that elasticity that allows a system to avoid other people's disturbances and resist adversity. And that is precisely what the national labor market is demonstrating, in view of the balance of unemployment and affiliation of the first quarter, which dynamites the most negative forecasts and points to a growth of the Gross Domestic Product (GDP) of up to 2% in 2023. Although endemic diseases persist and the horizon is not exempt from threats, analysts agree that employment is showing great strength and projects an acceleration in activity in the coming months.

Neither galloping inflation, nor the escalation of interest rates, nor the turbulence in the banking system, nor the increase in labour costs borne by companies... The complex national and international context to which the Spanish economy is exposed has not managed to blur the photo finish of employment at the end of the first quarter. With more than 200,000 new affiliates to Social Security and almost 49,000 fewer unemployed, last March stands as the best in history in terms of affiliation and forces the analysis houses to redo their economic estimates for the whole year.

Miguel Cardoso, chief economist for Spain at BBVA Research, said: "Our estimate even before the March affiliation data was for GDP growth of between 0.3% and 0.5% in the first quarter of the year. Now, the probability of an advance equal to or greater than 0.5% is greater than 50%." For this expert in trend analysis, "the important thing" about these data is that they show an "acceleration" in job creation that "will also be noticed in a solid second quarter, which could present similar growth."

If its forecasts are fulfilled – and the rest of the variables remain constant – average GDP growth could be "closer to 2% than 1.5% in 2023," Cardoso anticipates. Not without adding that over the next few months "the economy will have to bear the lagged impact of the increase in interest rates" and that "inflation remains higher than the increase in wages." "In addition to the effect that may have the greater volatility that has been observed during the last weeks in the financial markets," he warns in reference to the fall of Credit Suisse that has shaken the banks after the collapse of Silicon Valley Bank.

The truth is that in recent weeks the main organizations and institutions inside and outside our borders have already been improving their forecasts for the Spanish economy in the heat of the rebound that some indicators have experienced after the slowdown of the second half of 2022 that even ignited alerts about the possibility of entering a brief technical recession between the end of last year and the beginning of this. The European Commission, for example, has raised its growth projection for 2023 by four tenths, to 1.4%; the Bank of Spain has done the same by three tenths, up to 1.6%; and the recently updated Funcas panel has raised the consensus forecast by two tenths, to 1.5%.

And that's before knowing the evolution of the labor market in March. Now, with the data on the table, experts anticipate an acceleration of activity in the coming months. This is the case of the chief economist of Singular Bank, Alicia Coronil, who predicts that this improvement will be "closely linked to the rotation of consumption towards services and also at the beginning of the summer campaign, in which the prospects are maintained". The risk arises, as he warns, "once the season has passed in a context in which not only the tightening of financial conditions but also the lower credit will be felt, together with the weakness of the outlook in the industrial and construction sector" and in parallel to the evolution of inflationary pressures and energy prices during next autumn.

Although threats persist in the short term, the common feeling after knowing the unemployment and affiliation data for March is optimistic. Even the CEOE has highlighted the "greater resilience of the labor market" despite "the economic uncertainty derived from the war in Ukraine, inflation and the generalized increase in labor and production costs." Of course, the businessmen also warn that there are some shadows in the information made public yesterday by the ministries of Labor and Social Security.

Shadows in data

Specifically, the employer points out that although "employment endures", smaller companies "are suffering". They rely on the persistent bleeding of the self-employed regime, which has 1,300 fewer affiliates than a year ago and 6,000 fewer since the beginning of 2023. Also in the collapse of the trade of almost 20,000 professionals compared to March 2022 and in the closure of more than 13,000 companies in the first two months of the year, as well as in bankruptcy proceedings, which have increased by 20% in the last two years, according to provisional data from the College of Registrars.

These are not the only data that cast a shadow over an apparently positive balance. Despite registering the lowest unemployment figure at this time of year since 2008, there are still 2.9 million people in Spain willing to work who cannot find employment. And this without taking into account the unemployed with limited availability or specific demand for employment, which would place real unemployment at about 3.4 million people. Nor the workers in ERTE, which reach 15,379 affected, 755 more than in February.

In addition, of the total contracts registered in March (1.3 million) about 616,000 were indefinite, but more permanent contracts were signed than people who signed them, which implies that more than 33,000 workers had more than one contract of this type. In other words: "More multiple jobs and increased part-time hiring." In the words of the director of the Studies Office of the Workers' Trade Union (USO), José Luis Fernández Santillana, "the rotation in employment has reached indefinite hiring."

We will have to wait until the end of the month to see if the data recorded by the Government are translated into a Labour Force Survey (LFS) that supports the resilience of the labour market and the improvement of forecasts.

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