Spain’s Unemployment surpasses 24 percent
July 27, 2012
CNBC | JULY 27, 2012
Spanish unemployment hit its highest level in the second quarter since the country’s return to democracy in the mid-1970s, as firms shed more staff, driven by fears of prolonged recession and a crisis of confidence among consumers.
The jobless rate rose to 24.6 percent from 24.4 percent in the first quarter, the National Statistics Institute said on Friday, below a Reuters forecast of 24.9 percent. The number of unemployed Spaniards rose to 5.7 million.
“It’s another example of in, and with the economy unlikely to expand anytime soon, and the dire position the economy is probably more likely to fall deeper into recession, things are only going to get worse,” economist at Capital Economics Ben May said.
The headline figure was the highest since current records began in 1976, the year after Spain’s dictatorship ended with the death of Francisco Franco.
Spain’s economy has stagnated or been in recession since the beginning of 2008 after the labor-heavy property sector stalled as a glut of cheap credit dried up.
The latest recession, which began in the first quarter, is expected to last into next year while the government said last week it does not expect unemployment to fall much below 22 percent until 2015 at least.
Consumer and business confidence has been badly dented by concerns that Spain may need a full sovereign bailout as nervous markets push the country’s risk premiums to euro-era highs.
Almost a third of all those unemployed in the euro zone are in Spain, with young people the worst hit. According to figures from EU statistics agency Eurostat, half of the country’s people under 26 and available for work are unemployed.