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Spanish Unemployment Drops First Time In 5 Months

Spanish Unemployment Drops First Time In 5 Months

Spain's unemployment decreased for the first time in five months in December as service providers increased their head-counts during the holiday season, giving rise to hopes that the country might emerge from recession in late 2013, latest data showed Thursday.

The number of unemployed persons decreased 1.2 percent from the previous month to around 4.85 million in December, the Labor Ministry said.

The improvement reflects fresh staff intakes by service sector firms in the run-up for Christmas and the New Year. The latest figure is the best ever recorded for the month of December, the agency said.

Among the various economic sectors, the number of jobless declined by 49,438 persons in the service sector and by 3,092 persons in agriculture. Meanwhile, the figure rose by 2,794 persons in industry and by 4,325 persons in the construction sector.

Unemployment among youth, aged below 25, declined by 6.11 percent sequentially during the month. Compared to December 2011, total unemployment, however, increased by 9.64 percent.

The latest purchasing managers survey showed that Spanish manufacturers reduced their workforces at a faster rate in December than in the previous month as the slump in production continued amid a further weakness in new business.

Spain's jobless rate hit a record 25 percent in the third quarter. In October, the unemployment rate for the entire euro area stayed at a record high 11.7 percent as the unfolding austerity program forced both governments and companies to shed jobs.

The Spanish economy remained in a deep recession in third quarter, with gross domestic product falling 0.3 percent sequentially, following a 0.4 percent drop in the second quarter.

In its latest bulletin, the Bank of Spain said the economy likely contracted further in the fourth quarter, deepening the ongoing recession, as economic activity continues to be dragged down by high unemployment and the banking crisis. Adding to the economic slump, domestic demand weakened further in the final three months of the year, the report said.

Separate data today showed that Germany's unemployment increased in December as Europe's largest economy likely entered a contraction in the fourth quarter.

by RTT Staff Writer

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