New figures from Spain's Employment Ministry show that the total number of unemployed people in the country fell by 4,979 in March.
In March last year, by contrast, 38,769 people joined the jobless queue.
The figures released on Tuesday reveal this was the first time since 2008 that Spain's jobless rate fell in March.
The drop was 0.1 percent, El Pais reported.
At the same time, 30,528 people more people registered as working in March — a fact that El Pais put down to tourism and service jobs stemming from the Easter holidays.
The number of people registering as being out of work in March fell in the services sector but was up in construction, agriculture and industry.
After smoothing out seasonal blips, the number of registered unemployed in March stood at 4,857,929 — 6,212 fewer than in the previous month.
A broader, quarterly household survey by the National Statistics Institute provides the official unemployment rate, which hit 26.02 percent in the fourth quarter of 2012, a record high since the re-birth of Spanish democracy after the death of General Francisco Franco in 1975.
Prime Minister Mariano Rajoy's conservative government had predicted the economy will contract by 0.5 percent this year and grow by 1.2 percent in 2014 but last month it said it would have to revise its forecast.
It has imposed steep spending cuts and tax rises, aimed at saving €150 billion ($194 billion) between 2012 and 2014, measures that have prompted mass street protests and added to job losses. A total of 969,627 employment contracts were signed in March, or 85,000 less than a year ago.