Economic relapse drives jobless numbers to new record highs

Jobless claims in Spain rose for the fifth month in a row in December to record highs as the economy's weak recovery from its worst recession in living memory evaporated.

According to figures released Tuesday by the Labor Ministry, the number of people officially registered as unemployed climbed by 1,897 from November to 4.422 million at the end of 2011, over a fifth of the working population. December is normally a better month for the local labor market as employers increase hiring for the Christmas holiday period. In December 2010, jobless claims fell by 10,221.

"The unemployment figures for December confirm the deterioration in the economic situation in the second half of the year," the new secretary of state for employment, Engracia Hidalgo, told a news conference. For the whole of last year, the ranks of the unemployed swelled by 322,286, or 7.86 percent.

"This deterioration is not temporary," Hidalgo said. "The successive partial reforms [by the previous Socialist government] over the course of the past few months have failed to make the labor market more dynamic and flexible."

The new conservative Popular Party government has made overhauling the job market one of the pillars of its policies. The administration has asked the country's labor and business leaders to submit proposals for surmounting the persistent problem of soaring unemployment during times of crisis by next week.

"The current performance of [the labor market] throws into question the sustainability of the welfare state," Economy Minister Luis de Guindos said.

"As a result, the fundamental objective, the priority objective of policy, needs to be overcoming this situation," de Guindos said.

The performance of different segments of the labor market was mixed in December. Jobless claims fell in agriculture and the services sector as well as in the case of first-time jobseekers, but rose in industry and construction. The number of women out of work fell, but more men were unemployed.

According to the latest figures from the National Statistics Institute, Spain's jobless rate at the end of September stood at 21.5 percent, more than double the average in the European Union. That figure is expected to have increased in the final quarter of the year when the Bank of Spain estimates the economy contracted again after stagnating in the previous three months.

The OECD predicts Spain's jobless rate will average almost 22.9 percent in 2012 as the weakness seen at the end of last year extends into this year.