Unemployment falls slightly in first quarter. Employment at an all-time high
Between January and March, the unemployment rate was estimated at 6.6%, 0.1 p.p. lower than in the previous quarter and 0.2 p.p. lower than in the first quarter of 2024.
Despite the challenges, the Portuguese labour market continues to show resilience. According to data released this Wednesday by INE, the Portuguese Statistics Institute, in the first three months of the year, the unemployment rate fell slightly compared to both the previous quarter and the same quarter of the previous year. Employment, meanwhile, reached 2011 highs.
“The unemployment rate was estimated at 6.6%, 0.1 percentage points lower than in the previous quarter and 0.2 percentage points lower than in the first quarter of 2024″, says the statistics office.
In total, there were 365,800 unemployed people in Portugal between January and March, 2,500 fewer than at the end of last year and 3,800 fewer than at the start of 2024.
Of the total unemployed, 36.9 per cent had been in this situation for 12 months or more (long-term unemployment). Compared to the previous quarter, the weight of these situations in total unemployment fell by 0.6 percentage points. It increased, however, compared to the first quarter of 2024 (by 3.8 percentage points).
“This condition was more prevalent among those aged between 55 and 74 (56.0%), as well as among those who had completed at most the third cycle of basic education (46.2%)”, INE further details.
On the other hand, the youth unemployment rate (16 to 24 years old) was estimated at 21.2% in the first three months of 2025, having fallen compared to the previous quarter (0.6 percentage points) and the same quarter of the previous year (1.8 percentage points). Despite the drop, it still corresponds to more than three times the unemployment rate for the labour market as a whole.
Remote working grows at the start of the year
As for employment, INE says that the working population increased by 0.6% year-on-year and 2.4% year-on-year, to almost 5.2 million people. This is the highest figure in the series that began in 2011.
Among these workers, 20.9% (almost 1.1 million individuals) were teleworking in the first quarter of 2025, i.e. working from home using information and communication technologies. The share of employees carrying out this innovative work model increased both quarter-on-quarter (0.4 percentage points) and year-on-year (1.7 percentage points).
“Among employees who worked from home, 23.4% (264.2 thousand) did so always, 38.2% (430.7 thousand) did so regularly through a hybrid system that combines face-to-face work and working from home, and 14.4% (162.6 thousand) worked from home occasionally”, the statistics office’s data reveals.
On the other hand, up until March, the underutilisation of labour covered 628,400 people, which corresponded to an increase of 0.5% (2,900) compared to the previous quarter and a decrease of 3.4% (21,900) compared to the same period last year.
“The labour underutilisation rate, estimated at 11.1%, remained unchanged from the previous quarter and decreased year-on-year (0.6 percentage points)”, INE indicates.
Also noteworthy was the inactive population, which increased by 0.4% compared to the previous quarter and year-on-year, to 3.8 million people.
