MADRID — Spain’s unemployment rate fell to 9.8 percent in the third quarter, the national statistics institute said on Tuesday, the first single-digit reading since the spring of 2008 and a milestone for a country whose jobless rate reached 27 percent at the depths of the euro crisis.
The economy added 512,000 jobs over 12 months, lifting employment to a record 22.4 million. Gross domestic product is on course to grow 2.6 percent this year, the fastest of the large euro zone economies for the fourth year in a row. Tourism, which is expected to bring 97 million foreign visitors in 2026, accounted for a quarter of the gain. Construction employment rose 7 percent, and the broad services sector, from software to logistics to care homes, made up most of the rest.
The engine has been immigration. Foreign-born workers accounted for 47 percent of net job creation over the past year, the institute said. Spain regularized the status of about 900,000 undocumented residents under a 2025 program, and its population has reached 49.6 million, up by nearly 2 million since 2021, at a time when Germany’s and Italy’s are shrinking.
“Spain has been running the opposite experiment to much of Europe,” said Lucía Montalbán Ruiz, a labor economist at the Fundación de Estudios Laborales, a Madrid research group. “It let people in, it let them work, and it got growth. The question nobody has answered is whether it got productivity.”
The caveats are familiar. Youth unemployment remains at 24 percent. Output per hour worked has barely moved in five years. Real wages have grown about 1.1 percent a year, while rents in Madrid, Barcelona and Málaga have risen between 8 and 12 percent annually. The 2022 labor reform cut the share of workers on temporary contracts from 26 percent to 13 percent, but much of that shift went into “fijo discontinuo” contracts, permanent in name and seasonal in practice, which the statistics count as stable employment.
Yousef Benali, 34, who arrived from Morocco in 2019 and received residency last year, now operates a tower crane on a housing project in Valencia for 1,950 euros a month. “Four years ago I was picking oranges without papers,” he said. “Now I pay taxes, I have a contract, and I pay 1,100 euros for a two-room flat. Spain gave me work. It did not give me a place to live.”
Employers say the pool is still too small. José Antonio Puig Ferrer, who leads a business association in the Valencia region, said his members had about 30,000 open positions in construction and manufacturing alone. “We are not short of candidates,” he said. “We are short of electricians, welders and truck drivers, and no regularization produces those overnight.”
Even at 9.8 percent, Spain’s unemployment rate remains the highest in the European Union, ahead of Greece and Finland, and nearly twice the bloc’s average of 5.9 percent. Ms. Montalbán said the number carried a historical weight that economists were wary of. “We used to have a joke,” she said. “Spain’s unemployment never goes below 10 percent unless there is a bubble. We are about to find out whether it was a joke.”
A version of this article appears in print on Oct. 12, 2026, Section B, Page 5 of the European edition with the headline: Spain’s Jobless Rate Falls Below 10 Percent for the First Time Since 2008.
