Live News From Spain As It Happens

The number of registered unemployed in Spain fell for the third month running in July, largely thanks to a government public works programme designed to create jobs and the seasonal increase in employment in the tourism industry. Jobless claims fell 20,794 in July to 3.54m, but with nearly 18 per cent of the workforce unemployed, Spain still has the highest jobless rate in the European Union. Compared with July last year, unemployment was up by more than 1m, or 46 per cent. Spain’s socialist government, which is suffering in opinion polls as a result of the economic crisis, took some comfort from what it called the “good news” in the latest statistics.

“The July data confirm that the growth of unemployment continues to ease in line with what started in April, and they show the biggest fall in unemployment in any July since 2004,” said Maravillas Rojo, secretary general for employment.

However, she warned that it was too early to talk of a permanent change of direction and admitted that the number of unemployed could start to rise again, “but if it does rise we don’t expect it to do so at the same rate as it did towards the end of last year”. As in the rest of Europe, there are some early signs of possible economic recovery in Spain. Consumer confidence rose to a 17-month high last month and car sales have improved.

But much of the recovery in employment is the result of a hurriedly implemented €11bn ($16bn) public works programme – installing new street lights on suburban streets, for example – that has contributed to a rising budget deficit and is unlikely to be sustained for more than a few months. Economists predict that Spanish unemployment will rise above 20 per cent of the workforce before it starts to decline again.
 

Source: FT.com