Jobless claims continue to creep toward five-million mark in October

Unemployment continued its seemingly inexorable rise in October, with the number of people registered as out of work with public employment offices in Spain climbing for the third month in a row to close to five million.

According to figures released Monday by the Labor Ministry, jobless claims last month climbed by 128,242, or 2.73 percent, to the giddy figure of 4.833 million. The ministry pointed out that the increase in unemployment was lower than in October 2011, when jobless claims rose by 134,182.

The National Statistics Institute’s Active Population Survey, published last month, showed that the jobless rate climbed above 25 percent in the third quarter for the first time on record. According to the survey, which is considered a more accurate reflection of the state of the labor market, 5.778 million people are out of work.

About three-quarters of the newly unemployed came from the services sector, where an additional 97,610 people signed on as out of work. The only area where claims fell was in the construction industry.

“It’s not a good figure, just like all of those that mean more people looking for work without finding it,” said the secretary of state for employment, Engracia Hidalgo. “However, it is better than last year, and unemployment has now performed better for the past five months when compared with 2011.”

Registered unemployment fell in only two out of Spain’s 17 regions (Canary Islands and Valencia) with the biggest rises in Andalusia and Castilla-La Mancha.

The number of workers affiliated with the Social Security system fell by 73,077 to 16.736 million last month, with the biggest falls in hostelry and health and social services. The drop over the past 12 months was 623,586.

These figures “reflect a combination of a permanent decline in construction, specific adjustments to the public sector and a certain prolongation of the effect of the summer,” said the secretary of state for social security, Tomás Burgos.

The extent to which the current crisis is eroding the welfare state was witnessed by the fact that for the first time in almost 25 years, the number of people out of work and not entitled to unemployment benefits rose to over two million. The benefit coverage rate fell to 63.5 percent in September, the lowest in six years.

In the first nine months of the year the government has spent 23.697 billion euros on unemployment benefits, up 5.9 percent from the same period a year earlier. The administration is budgeting a rise for the full year of 4.5 percent to 28.503 billion euros, but the current trend suggests the figure is likely to be closer to 32 billion. In September alone, spending climbed by 7.1 percent to 2.589 billion euros.

Hidalgo said the Social Security system has already asked the Finance Ministry for more funding to meet benefit payments for the rest of the year, but did not quantify the amount required.

The blowout in this component of the budget will further test the government’s ability to meet its deficit-reduction target for the year of 6.3 percent of GDP.