The underutilization of labor has decreased to “historic lows,” reveals a monthly labor market analysis by Randstad Portugal, based on data from the National Statistics Institute (INE), the Institute for Employment and Professional Training (IEFP), and Social Security for September 2025.
“In September, employment rose by 0.2% compared to August, equating to an additional 9,400 people employed. The active population also grew by 0.3% (+13,700 people), reaching a total of 5.62 million, setting decades-long records,” stated a note accessed by Notícias ao Minuto.
Year-on-year, the same statement notes, “the trend is even more pronounced: there are 183,000 more people employed than in September 2024 (+3.6%), and 164,600 more active individuals (+3%).”
“This growth reflects the dynamism of the labor market, with employment increases surpassing the reduction in unemployment,” according to the released note.
The “unemployment rate was at 6%, higher than August (+0.1 p.p. monthly) but 0.5 p.p. lower than the previous year,” with “337,200 unemployed people in September, 18,500 fewer than a year ago.”
Work Underutilization Rate Falls: What Is It?
Work underutilization, an “indicator measuring situations where people work less than they wish or do not fully utilize their skills, reached a historically low rate of 10.2% in September.”
Currently, 585,300 people are in this condition, including 337,200 unemployed, 118,000 part-time workers desiring more hours, 31,800 inactive but job-seeking individuals unavailable for work, and 98,300 inactive yet available people not seeking employment,” stated the note.
Ten years ago, it was noted that “the rate was 22% of the extended active population (1.16 million people),” highlighting that “the drop to less than half reflects the improvement in labor market conditions, economic growth, and more effective policies.”
“The trend is of continuous reduction, bringing the country closer to a situation of full employment — where everyone who can and wants to work finds a job. Nonetheless, a mismatch persists between available skills and companies’ needs, the so-called structural unemployment, which tends to remain regardless of economic cycle phases,” it is explained further.
Isabel Roseiro, Marketing Director at Randstad Portugal, is quoted in the same note, stating that the “downward trend in the work underutilization rate is positive news as it shows the labor market is more dynamic and inclusive, bringing Portugal closer to a situation of full employment.”
“Still, a mismatch remains between available skills and the needs of companies. This structural unemployment tends to persist even during periods of growth, underscoring the importance of policies for skills development and career transition to accompany the labor market transformation,” she emphasizes.
Average Salaries Reported to Social Security Fell in August
According to Randstad, analyzing data published by the National Employment Centers (IEFP), “the number of registered unemployed increased by 0.3% (+962 people), reaching 302,600, and job applications rose by 0.7% (+3,179).”
It is noted that “registered unemployment increased only among men (+1,009), while there was a slight decrease among women (-47).”
“Year-on-year, there was a 2.6% decrease in registered unemployment (-8,149 people) and 10,551 fewer job applications (-2.4%),” the notes further state.
