Unemployment in Spain passes six-million mark for the first time
Jobless rate moves above 27 percent despite slowing recession Homes in which nobody has work increase to almost two million
The ranks of the unemployed in Spain climbed above six million for the first time ever as the jobless rate hit an unprecedented 27 percent in the first quarter of the year, this despite an easing of the recession in the period.
According to the National Statistics Institute’s Active Population Survey (EPA) for the period January-March, the number of people out of work rose by 237,400 from the previous three months to 6.202 million as the unemployment rate jumped from 26.02 percent to 27.16 percent, the highest level since the current series began to be compiled in 1976, just after the death of dictator Francisco Franco.
The deterioration in the labor market occurred despite the Bank of Spain estimating earlier this week that the contraction in output in the first quarter slowed to 0.5 percent on a quarterly basis from 0.8 percent at the end of 2012.
“The pace of the increase is surprising given that we were supposed to be in a softer phase of the recession,” Ricardo Santos, a euro-area economist at BNP Paribas in London, told Bloomberg. “We could now end the year at 28-percent unemployment and we may see a downward revision of first-quarter growth.”
The jobless rate has already reached the 27-percent level the IMF predicted would happen by the end of this year. The multilateral agency expects the domestic economy to contract by 1.6 percent this year after declining 1.4 percent in 2012.
The conservative Popular Party (PP) government of Prime Minister Mariano Rajoy is due on Friday to present its revised economic scenario for the next three years, as well as a new battery of reform measures. Economy Minister Luis de Guindos said earlier this week that the measures would seek to marry reducing the public deficit while stimulating economic growth.
Youth unemployment has risen to a record 57.2 percent
Spain is in the throes of its second recession in barely four years. Since the crisis broke, the number of people out of work has climbed by four million, while the jobless rate has increased by some 20 percentage points. The jobless rate was also boosted by a fall in the active population of 85,000 from the previous three months and by 235,300 from the same period a year earlier to 22.837 million as a result of immigrants returning home and Spaniards moving abroad in search of work.
The National Statistics Institute said earlier this week that the total population at the start of this year fell by 205,788 from a year earlier to 47.1 million, the first overall decline since 1996. The number of immigrants leaving the country was 216,125. The unemployment rate for foreign workers stands at 39.21 percent, 14.1 points higher than for Spanish workers.
The number of people in work fell by 322,300 to 16.634 million, the lowest rate since 2002. The drop in the public sector was 71,400 as a result of the government’s austerity drive, while the private sector shed 251,000 jobs.
The number of households with all of its members out of a job climbed 72,400 from the previous EPA quarterly survey, and 177,700 from a year earlier to 1.906 million. The number of unemployed people under 25 years rose by 30,200 in the quarter to 960,000 with the jobless rate for this segment of the labor market climbing by 0.2 points to a new record of 57.2 percent.
Unemployment fell practically across all of Spain’s regions, with the biggest increases coming in Andalusia, Valencia and the Balearic Islands.
The number of people out of work in the quarter increased by 170,500 in the services sector, by 66,800 in industry, 60,900 and agriculture, and by 24,200 in construction.
Prospects for a turnaround in the situation anytime soon are dim. While the economy is forecast to return to growth in 2014, the pace of the recovery is expected to be insufficient to start creating jobs again.