The summer brings rest and relaxation for those who can escape for a few days, and it can also paint an aura of optimism around macroeconomic data. The big tourism push re-energizes the labor market and lightly boosts consumer confidence.
But this year the good summer weather has not had a significant impact on the labor market, or at least as much as we had hoped. In June, unemployment was worse than a year ago. The same is true for July. And the situation could become even worse in August.
Yesterday Minister of Labor Valeriano Gómez announced that August unemployment figures do not look good. "August is typically a bad month given that unemployment usually rises."
This time, feeble employment figures are accompanied by slackening credit markets. Both affect families as much as businesses. The Bank of Spain is sounding the alarm after releasing credit data from June. Credit movement reached new lows since the crisis began. Family debt levels are at 15-year highs. The negative corporate and household data are clearly reflected in the real estate market: in June, new home mortgages plummeted more than 42% year-to-year.
Farewell to optimism
At the beginning of the summer, unemployment was the principal concern for citizens, followed by the state of the economy. The summer season has left them in dire straits and snapped the government's growth predictions. Moving the national elections to November was the Partido Socialista's last attempt to squeeze out and appropriate the best fiscal year data for themselves. But they will run out of juice.
