Spanish unemployment hits FIVE MILLION: Record rise leaves an incredible one quarter of the population unemployed



People registered as unemployed jumped by 59,444 compared with January

At the end of the fourth quarter, 26% of the population were unemployed

Spain has been battling to emerge from its second recession in three years



Unemployment in Spain has hit a record high of five million people after a rise in the jobless total.

The Labor Ministry said that the number of people registered as unemployed in February had jumped by 59,444 compared with January taking the total to 5.04million.

In Europe's fourth largest economy, 26 per cent of the population were unemployed at the end of the fourth quarter , the highest level since 1975.

Jobless economy: People queue outside a job centre in Madrid as Spain, the fourth-largest economy in Europe, is hit with a record unemployment rate with some 5million registered in February

Spain has been battling to emerge from its second recession in just over three years with its economy still reeling from the collapse of the once-booming real estate sector.

The Spanish economy first fell into recession in the second half of 2008, with millions of jobs were lost and tough austerity measures put in place.

Spain then sank into its second recession since 2009 at the end of 2011 after a burst housing bubble left millions of low-skilled laborers out of work and sliding private and business sentiment gutted consumer spending and imports.

Fueled malaise: Efforts by Prime Minister Mariano Rajoy to control Spain's deficits through billions of euros of spending cuts and tax hikes

Efforts by Prime Minister Mariano Rajoy's government to control one of the eurozone's largest deficits through billions of euros of spending cuts and tax hikes have fueled general malaise, further hampering demand.

When Rajoy took office in late 2011 there were 5.27 million jobless in Spain.

Battling to reduce a swollen deficit and avoid a bailout, the year-old conservative government has brought major financial and labor reforms and applied severe cutbacks in wages and spending but so far the economy has shown few signs of recovery.

The austerity measures are aimed at lowering the deficit, but are hurting the economy in the short-term, while the reforms will only help growth in the longer-term. That means the economy will suffer more before it recovers.

The European economy has also been rocked by a downturn in factory output as hopes of recovery were dealt another damaging setback last Saturday.

Gloomy figures showed British manufacturers suffered a decline in activity last month – the first since November – while factory output in the eurozone fell for a 19th month in a row in February as a dire performance in France offset a return to growth in Germany.

It came as a separate report showed unemployment hit a record high of 11.9 per cent in the single currency bloc in January.

The slump in manufacturing and rise in unemployment to 19m – up 1.9m on January 2012 – rounded off a dismal week for the eurozone as the political deadlock in Italy threatened to plunge the region deeper into crisis.

Crisis: A man waits outside a Madrid employment office as the latest figures revealed that 26 per cent of the population were unemployed at the end of the fourth quarter, the highest level since 1975

‘The overall picture is consistent with a eurozone economy that is still stuck in recession,’ said Lee Hardman, currency strategist at Bank of Tokyo-Mitsubishi.

Research group Markit said its index of activity in UK manufacturing – where 50 is the cut off between growth and decline – sank from 50.5 in January to 47.9 in February. It left Britain on the brink of a third recession in five years after the economy shrank by 0.3 per cent in the final quarter of 2012.

Chris Williamson, chief economist at Markit, said: ‘This represents a major setback to hopes that the UK economy can return to growth in the first quarter and avoid a triple-dip recession.’

The eurozone manufacturing index also read 47.9. Germany scored 50.3 but Spain hit 46.8, Italy 45.8 and France 43.9.

Battling to reduce a swollen deficit and avoid a bailout, the year-old conservative government has brought major financial and labor reforms and applied severe cutbacks in wages and spending but so far the economy has shown few signs of recovery









