Unemployment in Spain, which has the highest jobless rate in the European Union, rose by the most in at least 13 years in January in the 10th monthly increase as Spain’s recession deepens.
The number of people registering as unemployed rose 6.4 percent, or by 198,838, from the previous month to 3.33 million, the Labour Ministry said in an e-mailed statement today.
That was the largest jump since at least 1996. From a year earlier, the number of claimants jumped 47 per cent, or more than a million.
Rising unemployment in Spain, once the motor of job-creation in the euro region, now accounts for almost all of the increase in the region’s overall joblessness, according to EU statistics office Eurostat.
The government forecasts unemployment will rise to a decade high of almost 16 percent this year, after the credit crunch brought an abrupt end to a debt-fueled economic boom and threatens to push the economy into its deepest downturn in half a century.
“There’s nothing we can see that might allow us to say that the situation is going to improve,” said Jesus Castillo, economist at Natixis in Paris.
He forecasts an unemployment rate of 18 per cent at the end of this year and 19 per cent at the end of 2010.
Spain’s jobless rate is already almost double the European average, at 14.4 per cent in December, compared with 7.4 per cent for the EU overall, according to the most recent monthly data from the region’s statistics office.
Youth unemployment in Spain rose to 29.5 per cent in December, compared with an EU average of 16.6 per cent.
Spain’s jobless rate fell to an almost 30-year low of 7.95 per cent in the second quarter of 2007 at the peak of a construction boom that allowed the country to create more than half the new jobs in the euro region between 2002 and 2005.
Unemployment, as measured by a quarterly survey, has risen every quarter since. As the construction slump spread to the rest of the economy, carmaker Nissan Motor said it would cut 38 per cent of its workforce at a factory in Spain and Renault SA won Spanish government approval to temporarily lay off as many as 10,311 workers.
Bloomberg