Summer Service Sector Boosts Employment to Record Highs

The summer season has positively impacted the job market in Portugal, marking a significant increase in employment rates. In the third quarter of 2025, the number of employed individuals reached an unprecedented 5.33 million, achieving a record high.

Record Employment Figures in Portugal

The National Institute of Statistics (INE) reported that employment rose by 1.6%, adding approximately 83,800 jobs compared to the previous quarter. The year-over-year comparison reveals an impressive increase of 3.7%, which translates to about 191,200 additional workers.

Impact of the Service Sector

The surge in employment is largely driven by growth in the service sector. The sector saw an annual increase of 4.9%, with 184,000 more individuals employed compared to the same quarter last year. Key contributors to this growth include:

• Trade
• Transportation
• Tourism-related activities, such as accommodation and catering

These segments collectively accounted for over a third of the overall growth in the service sector.

Decline in Unemployment Rate

Alongside the increase in employment, Portugal’s unemployment rate has dropped to 5.8%, the lowest level since mid-2020. This marks a decline of 0.1 percentage points from the previous quarter and 0.3 percentage points compared to the same period last year.

Statistics on Unemployment

As per INE’s survey, the number of unemployed individuals fell to 326,600, a decrease from both the previous quarter and the year prior. Contributing factors to this decline include:

• Reduction in unemployment among men (decrease of 6,400 or 4.0%)
• Decrease among those aged 45 to 54 (drop of 9,300 or 14.1%)
• Reduction among individuals with only basic education (13,900 or 11.4%)
• Decrease in those seeking new employment (5,400 or 1.9%)
• Reduction in long-term unemployment (10,000 or 7.8%)

Long-term unemployment, defined as lasting 12 months or more, now affects 35.9% of the unemployed population, with men disproportionately affected.

Regional Unemployment Rates

Unemployment rates vary across regions, with some areas reporting higher figures than the national average:

Despite regional disparities, the overall employment trend in Portugal is promising, reflecting a robust recovery in the labor market driven by the summer service sector.