Spain unemployment rate hit a record: youth rate at 55%
- 24 January 2013
- From the section Business
Spain's unemployment rate has hit a modern day record, and joblessness among young people has topped 55%.
Official data showed that the jobless rate in the last three months of 2012 rose 1% to 26%, or 5.97 million people.
The figure, the highest since the mid-1970s, follows Spain's prolonged recession and deep spending cuts.
The impact has been acute for 16 to 24-year-olds, who saw the rate in the last quarter of 2012 surge to 55.13% from 52.34% in the previous three months.
Spain's economy sank into recession after its property crash left millions of low-skilled workers without a job, and general economic decline eroded business and consumer confidence.
"We haven't seen the bottom yet and employment will continue falling in the first quarter," said Jose Luis Martinez, strategist at investment bank Citigroup.
The figures, from the National Statistics Institute, mean Spain's jobless rate is twice the European Union average.
The unemployment numbers will be a blow for Prime Minister Mariano Rajoy's government, which was last year forecasting a jobless rate of 24.6% by the end of 2012.
When Mr Rajoy took office in late 2011 there were 5.27 million people unemployed in Spain.
Youth unemployment continues to be a cause for concern across the European Union, not just Spain.
Tackling youth unemployment across the 27-nation bloc has become a serious issue for governments and policymakers.
Italy's prime minister Mario Monti, said on Thursday that the current challenge was to "bring new life to the economy, and the first ones to benefit will be the youth".
Italy's unemployment rate is 11%, and 37% among young people. He said that young people were being helped into work by measures such as awarding tax relief to companies employing 16-24-year-olds and changes to increase labour market flexibility.
But he said improvements were being impeded by some trade unions' resistance to change.
Eurostat, the EU's statistics body, estimates that last November there were 5.8 million people (23.7%) aged under 25 unemployed in the 27 countries, of whom 3.73 million (24.4%) were in the eurozone area.
For last November, the lowest rates were in Germany (8%), Austria (9%) and the Netherlands (9.7 %), and the highest was in Greece 57.6 % (September 2012 figure) and Spain (56.5%).
However, many economists have wondered if the jobless data exaggerates the problem.
Jobless numbers include economically inactive people, including young people who are in education.
Some experts argue that youth unemployment is better and more accurately represented by using a ratio, calculated as the share of total number unemployed.
This reduces the extent of youth unemployment, although the figures remain high.
Eurostat estimated that for the last three months of 2011, the ratio of youth unemployed was 19%, the highest in the EU (9.1%) and ahead of Greece (13%), UK (12.4%), Portugal (11.7%), and Germany (4.5%).