Spain Says Jobless Queue Shrinks in December
Spain's right-leaning government hailed a rare glimmer of economic hope Thursday when figures showed the jobless queue shrank in December, but unemployment was still up dramatically over the year.
Millions of jobs have been destroyed in Spain since a property market crash and a global financial crisis rocked the economy in 2008.
Lines outside unemployment offices have grown further since Spain slipped back into recession in mid-2011 and the government took an axe to spending, provoking two general strikes and growing protests in the past year.
But in December, the number of people registered as unemployed in the eurozone's fourth-biggest economy fell by 59,094, or 1.2 percent, to 4.85 million from the previous month -- the first decline since July last year, the Labor Ministry said.
When adjusted to smooth out seasonal blips, Spain's jobless numbers were down by 41,023 people, or 0.8 percent.
Spain's Labor Ministry said it was the best performance in the month of December since existing records began in 1996, with young people, women and first-time workers doing particularly well.
Over the year, however, the ranks of the jobless surged by 426,364 people, or 9.6 percent, raw figures showed. After seasonal adjustments, the number of unemployed was up by 10.3 percent.
Junior labour minister Engracia Hidalgo pointed to a slowdown in the growth of unemployment, however, saying the jobless queue had grown by 233,000 people in the second half of 2012 compared to a surge of 300,000 a year earlier.
Hidalgo nevertheless highlighted "the need to treat the December figures with caution and to closely follow the trend in the next months".
Spain's Budget minister Cristobal Montoro called it an "extremely positive" development but analysts remained downbeat on the overall outlook.
"The continued rise in unemployed workers previously employed in industry and the construction sector was a stark reminder of the continued grip of the deepening recession," said London-based analyst Raj Badiani of IHS Global Insight.
"We expect renewed job losses at the start of 2013, with the latest lead indicators suggesting the economy is set to endure further output losses in the first half of 2013."
Javier Velazquez, an economist at Madrid's Complutense University, said the decrease in the number of registered job seekers could be partly due to unemployed people giving up hope and ceasing to sign on.
A broader, quarterly household survey by the National Statistics Institute provides the official unemployment rate, which hit 25 percent in the third quarter for the first time in modern Spanish history.
Prime Minister Mariano Rajoy's government is forecasting an end-2012 unemployment rate of 24.6 percent, with a decline to 23.3 percent in 2013.
But the OECD economic body has forecast that unemployment will continue to climb and reach 26.9 percent in 2014.
Economy Minister Luis de Guindos said on Tuesday he hoped for a return to job creation in late 2013. This year the government is tipping an economic contraction of 0.5 percent while the OECD predicts a 1.4-percent slump.
"I think 2013 will be better than 2012," de Guindos told Cadena Ser radio.
"The groundwork is being laid for us to begin to see positive employment growth rates in the fourth quarter of this year."