What is the current unemployment rate in Portugal?
The unemployment rate in Portugal is 5.8% as of Q3 2025.
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Economia / Emprego
Portugal Unemployment Rates Fall to 5.8% in Q3 2025
Portugal’s job market showed strong performance in the third quarter of 2025. The unemployment rate decreased to 5.8%, marking the lowest level in five years. This improvement was largely fueled by the thriving services sector, which saw si...
Key Insights
- The unemployment rate fell to 5.8%, the lowest since 2020.
- Total employed population exceeded 5.3 million, a historic high.
- The services sector was the primary driver of job growth, particularly in commerce, transportation, and tourism-related activities.
- Youth unemployment (16-24 years) increased slightly but remained below the previous year’s levels.
- Long-term unemployment also decreased, affecting 35.9% of the unemployed.
In-Depth Analysis
The Instituto Nacional de Estatística (INE) reported that the employed population reached 5.332 million in Q3 2025, a 1.6% increase from the previous quarter and a 3.7% rise compared to the same period last year. The services sector added 184,000 jobs, driven by commerce, transportation, accommodation, and restaurants.
The youth unemployment rate was estimated at 18.8%, increasing by 0.7 percentage points from the previous three months but decreasing by 0.9 percentage points year-on-year. The labor underutilization rate was estimated at 9.9%, down by 0.2 percentage points from the previous quarter and 0.5 percentage points year-on-year.
Breaking it down by region, the unemployment rates were higher than the national average in Península de Setúbal (6.9%), Grande Lisboa (6.2%), and Norte (6.1%). The lowest rates were observed in Oeste e Vale do Tejo (4.6%) and Algarve (4.5%).
Randstad Portugal’s analysis of INE, IEFP, and Segurança Social data highlighted that labor underutilization hit a historic low of 10.2% in September 2025. This includes those working fewer hours than desired, unemployed individuals, and those seeking employment but unavailable. This reflects improved labor market conditions, economic growth, and more effective policies.
FAQ
Which sector contributed the most to employment growth?
The services sector, especially commerce, transportation, and tourism.
What is the labor underutilization rate?
The labor underutilization rate is 10.2%, a historic low.
How does the youth unemployment rate compare to last year?
It has decreased by 0.9 percentage points year-on-year.
Takeaways
- Portugal’s job market is improving, driven by the services sector.
- Unemployment and labor underutilization rates are declining.
- Regional disparities in unemployment rates still exist.
- The trend toward lower unemployment and underutilization suggests a healthier economy and improved job opportunities.
Discussion
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Sources
Disclaimer
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