Madrid, January 27, 2026 – The city of Madrid has achieved its lowest unemployment rate since 2008, reaching 6.6% in the fourth quarter of 2025. This significant improvement is 3.3 percentage points below the national average and marks a full point reduction compared to the previous year, as reported by the Labour Force Survey (EPA) published today by the National Institute of Statistics.
Unemployment Falls Across All Demographics
The total number of unemployed individuals in Madrid stood at 128,500 by the end of 2025, reflecting a year-on-year decrease of 13.5%, or 20,100 fewer jobless people. Compared to the previous quarter, unemployment dropped by 16.4%, translating to 25,200 fewer unemployed individuals.
Both men and women experienced a decline in unemployment. The number of unemployed men decreased by 18.1% year-on-year, while for women, the reduction was 8.5%. Consequently, the unemployment rate for both groups is now at 6.6%.
Employment Growth in Key Sectors
Employment in the capital saw an increase of 14,100 people compared to the previous quarter, a rise of 0.8%, bringing the total number of employed individuals to 1,815,600. The year-on-year variation is even more substantial, with 18,200 more employees, representing a 1% increase.
The activity rate in Madrid for the last quarter of 2025 was 63.6%, nine-tenths lower than a year ago, but still 4.7 points above the national average. The active population experienced a slight decrease of 0.1% compared to the same quarter of the previous year, settling at 1,944,100 people.
Sector-wise, the industry recorded a 7.7% increase in employment compared to a year ago. The services sector, which accounts for 88% of total employment, also saw growth, with a 1.1% interannual increase. In contrast, the construction sector experienced a 7.4% decrease in employment over the last year.
Shift Towards Stable Employment
The number of self-employed individuals decreased by 5% year-on-year, while the number of salaried employees in Madrid increased by 1.8%. Within the salaried category, public sector employees declined by 10.7%, whereas private sector employees saw a significant increase of 4.2%.
Regarding employment contracts, permanent contracts rose by 5.1% in the last year, while temporary contracts fell by 19.8%. Salaried employees with permanent contracts now represent 89.3% of the total, indicating a positive trend towards more stable employment conditions in the city.
This positive trend in Madrid’s labour market underscores the city’s economic resilience and its capacity to generate employment despite broader economic challenges. The sustained decline in unemployment and the growth in key sectors signal a robust recovery and a promising outlook for the capital’s workforce.
Source: https://www.madrid.es/portales/munimadrid/es/Inicio/Actualidad/Noticias/La-ciudad-de-Madrid-presento-un-descenso-interanual-del-paro-del-13-5-en-el-ultimo-trimestre-de-2025/?vgnextfmt=default&vgnextoid=88cbf40df1ffb910VgnVCM100000891ecb1aRCRD&vgnextchannel=a12149fa40ec9410VgnVCM100000171f5a0aRCRD
