Spain's unemployment rate declined for the first time in two years in the June quarter from a record high in the beginning of the year, adding to signs that activity in the recession-stricken economy is picking up.
The number of jobless persons fell to just below six million, while employment moved up as private sector firms raised headcounts.
Yesterday Bank of Spain said that Spain's long-drawn recession has eased in the second quarter, supported by improvement in the external sector and a slower decline in domestic demand.
Data released by the National Statistics Institute on Thursday showed that the unemployment rate dropped to 26.26 percent in the three months ended June from 27.16 percent in the first quarter, which was an all-time high. Economists had forecast a further rise to 27.2 percent. In the second quarter of 2012, the jobless rate was 24.63 percent.
The unemployment rate still remains one of the highest in Europe with the economy stuck in a recession for one-and-half years, crippling the country's industrial activity. Stringent austerity and sharp economic downturn were the major factors that forced companies to shed jobs across Europe.
There were around 5.97 million unemployed persons in Spain at the end of the second quarter, lower by 225,200 than in the preceding three-month period. Year-on-year, unemployment increased by 5 percent.
At the same time, overall employment increased by 149,000 sequentially to 16.78 million in the second quarter, supported mainly by the private sector where declines in employment in construction and industry were more than offset by increases in services and agriculture. Public sector employment, meanwhile, stayed broadly unchanged.
The rate of GDP contraction slowed to 0.1 percent from 0.5 percent in the first quarter, according to preliminary estimates from the Bank of Spain.
The International Monetary Fund projects 1.6 percent contraction this year for Spain, before possible stagnation in 2014. While there are signs that the recession may end soon, the lender said the country's outlook remains difficult.
In the month of May, Spain's merchandise trade shortfall declined significantly from last year, helped by a marked increase in exports and lower imports.
Government data that came out earlier this week showed that Spain's government debt to GDP increased to 88.2 percent in the first quarter from 84.2 percent in the previous quarter.
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May 01, 2026 15:54 ET Central banks dominated the economics news flow this week with almost all major ones announcing their latest policy decisions and many boosted expectations for a rate hike in June. In other news, several countries released the preliminary data for first quarter economic growth. In the U.S., comments by Fed Chair Jerome Powell were also in focus as his term ends this month.