Jobless claims decline for the first time in five months

Jobless claims in Spain fell for the first time in five months in December but that failed to camouflage what has been a dire year for the domestic labor market, with the sagging economy shedding over 2,000 jobs a day in 2012.

According to figures released Thursday by the Labor Ministry, the number of people signed up at employment offices as being out of work declined by 59,094 from November to 4.848 million.

For the year as a whole, the ranks of the unemployed were swelled by 426,364, an increase of 9.64 percent over a year earlier, while the number of people affiliated to the Social Security system declined by 797,240, a rate of 2,162 per day, to 16.422 million. There are now less than two workers contributing to the Social Security system for every single pensioner drawing benefits from it

December is normally a good month for the labor market, particularly the services sector, due to seasonal hiring for the Christmas holiday period. Jobless claims in the services sector declined by 49,438 and were down by 13,683 in the case of first-time jobseekers. Unemployment increased in construction and industry. The Labor Ministry said the December figures were the best for this month in the current statistical series.

In contrast, the Social Security system shed a further 88,367 adherents in December, a phenomenon the Labor Ministry attributed mainly to legislative changes, which resulted in carers for mainly old people exiting the official system.

However, for the fifth year in a row, the domestic economy destroyed jobs as the country slipped back into recession for the second time in three years, with the decline in activity exacerbated by the government’s austerity drive to reduce the public deficit. Output is estimated to have contracted 1.5 percent in 2012.

According to the latest Active Population Survey by the National Statistics Institute, the number of people out of work at the end of the third quarter stood at 5.7 million, while the jobless rate rose to over 25 percent.

Unemployment rose despite the introduction of a draconian labor reform in February aimed at transforming the habitual situation in Spain of soaring unemployment during times of economic downturn. However, the main thrust of the makeover was to make it cheaper and easier to sack workers, a development employers evidently took advantage of.

Earlier this week, Economy Minister Luis de Guindos predicted that the reform would eventually bear fruit, and predicted the economy would be growing at a sufficient clip by the end of this year to start creating jobs again. Before that forecast eventuality, the OECD expects Spain’s unemployment rate to climb to 27 percent this year.