Spain kept growing at the top of the euro area range. Gross domestic product rose 0.6 percent in the third quarter from the second, one tenth slower than the previous quarter, and 2.7 percent from a year earlier, one tenth faster, the National Statistics Institute said in its advance estimate.
Domestic demand did almost all of the work. It contributed 0.5 points of the quarterly growth and 2.6 points of the annual growth, with external demand contributing 0.1 points on the quarter and almost nothing on the year. Household final consumption rose 0.6 percent on the quarter and government consumption 0.9 percent, while gross capital formation rose only 0.1 percent. Exports of goods and services rose 1.3 percent on the quarter and imports 1.1 percent.
On the supply side every large sector grew on the quarter except construction, whose value added was close to flat after rising eight tenths faster in the previous quarter. Industry rose 0.7 percent, manufacturing 0.4 percent and services 0.7 percent, with primary branches up 1.5 percent.
The income detail shows why Spanish inflation is sticky at the source. Compensation of employees rose 6.3 percent on the year, with average compensation per full time equivalent job up 3.9 percent, and the GDP deflator rose 3.1 percent on the year, three tenths faster than in the second quarter. Employment in full time equivalents rose 1.6 percent on the year, down from 2.3 percent, and hours worked rose 2.2 percent. Growth is slowing at the margin, but wage and price growth inside it are not yet at rates consistent with 2 percent inflation.