Spanish Registered Unemployment Passes Five Million
Registered unemployment in Spain surpassed five million for the first time in February, government data showed Monday, as the euro zone's fourth-largest economy contracted and the government imposed steep spending cuts.
The number of people registering for unemployment benefits rose 59,444 or 1.19 percent from the previous month to 5,040,222 as companies in all areas of the economy continued to lay off staff, the labor ministry said in a statement.
The overall unemployment rate is released separately and quarterly. It stood at 26.02 percent in the fourth quarter -- the highest level since the re-birth of Spanish democracy after the death of General Francisco Franco in 1975 - with 5.97 million people out of work.
This is higher than the number of people registering for benefits because some unemployed people's jobless benefit has run out.
Spain, once the motor of job creation in the euro zone, is in a double dip recession, having never recovered from the collapse of a property boom in 2008.
Prime Minister Mariano Rajoy's conservative government has imposed steep spending cuts and tax rises, aimed at saving 150 billion euros ($194 billion) between 2012 and 2014, which have prompted mass street protests and added to job losses.
He has vowed to lower the public deficit from the equivalent of 9.4 percent of gross domestic product last year to 2.8 percent in 2014.
The Spanish economy contracted by 1.4 percent in 2012 and the government expects it will shrink by 0.5 percent this year before expanding by 1.2 percent in 2014, a more optimistic forecast than those of most analysts and international organizations.
The number of registered jobless rose in February by 6.96 percent or 328,124 people compared with the same month last year.
The number of registered jobless in the dominant service sector rose by 39,788 in February, in industry by 1,581, agriculture by 4,882 and construction 1,377.
Spain's jobless rate fell to an almost 30-year low of 7.95 percent in the second quarter of 2007 at the peak of a decade-long economic boom that allowed the country to create more than half the new jobs in the euro zone between 2002 and 2005.
But the jobless rate has risen steadily every quarter since as the country's housing market collapsed and it is expected to continue rising.
The European Commission predicts Spain's unemployment rate -- already the second highest in the eurozone after Greece's -- will hit 26.9 percent in 2013 before easing slightly to 26.6 percent in 2014.
"The pursuit of the correction of significant internal and external imbalances built up during the boom period has put the brakes on consumption and private investment," it said in its latest economic forecast released last month.
"This continues to have a significant impact on employment and as a consequence, unemployment should continue to rise."
Spain's recession deepened in the fourth quarter of last year as high unemployment and biting austerity measures prompted households to slash spending.
Gross domestic product contracted 0.8 percent in the final quarter of 2012, the steepest decline since the second quarter of 2009 and more than double the 0.3 percent fall posted in the previous three-month period.
The Spanish economy appeared to continue its contraction in the first quarter of 2013 due to sluggish domestic demand, the Bank of Spain said last week in its latest monthly economic bulletin.
Rajoy, in power since December 2011 after his Popular Party ousted the Socialists in an election landslide, argues his government's budget restraint and economic reforms have saved the country from economic disaster.
"We have left behind us the constant threat of imminent disaster and we are starting to see the path for the future," he said during a state-of-the-nation debate in parliament last month.
| Copyright © 2012 Naharnet.com. All Rights Reserved. | https://www.naharnet.com/stories/en/74229 |