Spain jobless rate nears 25% in second quarter

Spain’s unemployment rate rose in the second quarter to 24.63 per cent and a huge 53 per cent among the young, despite the start of the tourist season, official figures showed last Friday.

Spain’s conservative government has approved tens of billions of euros’ worth of spending cuts, tax hikes and other measures

The increase in the overall jobless numbers was smaller than in the first quarter, with the number of eligible people out of work rising to nearly 5.7 million people.

Between April and June, 53,500 people lost their jobs, compared with 365,900 in the first quarter, the national statistics office said.

The unemployment rate rose from 24.4 per cent recorded in the first quarter – already the highest in the industrial world – as Spain entered its third straight quarter of economic contraction.

Among those aged 16 to 24, the rate rose to a huge 53.27 per cent from 52.01 per cent the previous quarter, reflecting the ongoing impact of Spain’s double-dip recession following the collapse of a construction boom in 2008.

The number of households in which all eligible members are unemployed rose by 9,300, reaching more than 1.73 million overall.

The country is in its second recession in four years, hit hard by the bursting of the property bubble that threw millions out of work.

Tomorrow, the Bank of Spain will publish its provisional estimate of economic output in the second quarter, expected to show a contraction of 0.4 per cent, compared with a 0.3 per cent decrease in the first three months.

Under pressure from European authorities, Spain’s conservative government has approved tens of billions of euros’ worth of spending cuts, tax hikes and other measures.

The latest set of measures announced by Prime Minister Mariano Rajoy on July 11 aimed to save €65 billion over three years.

Rajoy says the steps will help cut the public deficit in line with targets agreed with the EU and strengthen the economy in the long term.

Critics say the measures will make the poor suffer unfairly from moves such as a public sector bonus cut and a rise in sales tax that together will hit consumption.

Hundreds of thousands of Spaniards have marched noisily in the street over recent weeks in protest at the measures.

The Spanish region hardest hit by rising unemployment was Catalonia in the northeast with a rate of 33.92 per cent, Friday’s figures showed. The lowest rate was 14.56 per cent in the affluent Basque Country.

Spain’s regions became a focus of financial concerns last week when Catalonia and others indicated they would need to borrow from a central government rescue fund in order to keep paying their debts.

Spain’s latest unemployment forecast is for a rate of 24.6 per cent at the end of 2012.