Registered unemployment in Spain, which has the highest jobless rate in the European Union, fell for the second month in June as hiring by state-work programmes offset job losses from the worst recession in six decades.
The number of people claiming unemployment benefits fell 1.5 per cent, or by 55,250 people, from the previous month to 3.56 million, the labour ministry said in Madrid today.
It was the first time in two years that there have been two straight monthly declines. Unemployment increased 49 per cent from a year earlier.
Spain's socialist government, grappling with the biggest increase in unemployed workers in the euro region, will inject the equivalent of 2.3 per cent of gross domestic product into the economy this year in what it calls Europe's largest stimulus package.
Spain accounts for 60 per cent of the euro region's new unemployed in the past year and the jobless rate may rise to 20.5 per cent in 2010, the European Commission forecasts. The Spanish unemployment rate rose to 18.1 percent in April, Europe's highest and more than twice the EU average of 8.6 per cent.
The European statistics institute publishes new data for May at 11am in Luxembourg today.
Spain's stimulus program includes public-building projects and tax cuts that will help push the budget deficit to 9.5 per cent of GDP this year, or more than three times the EU limit, the commission forecasts. The government forecasts a shortfall of 8.4 per cent next year as it considers extending unemployment aid for people at the end of their contributions-based benefits.
Finance minister Elena Salgado has pledged to bring the shortfall back within the EU limit of 3 per cent in 2012.
Bloomberg