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Spain – Unemployment hits new high and things are to get worse

30 July 2012

Unemployment in Spain has reached a new high rising to levels last seen in 1976. The jobless rate increased to 24.6% between April and June, up from 24.4% in the previous quarter, the latest official statistics show.

With 5.7 million Spaniards or nearly one in four now looking for work, the federation of temporary employment agencies (AGETT) said that things are likely to get even worse. The association said the increase in unemployment was “really bad” and said the third quarter of the year will “in no way be good” in terms of employment.

It further argued that the figures are an “unmitigated evil” and urged to rethink labour market policies which are destroying industrial jobs. AGETT warned that the increase in unemployment, which was higher than expected, also “prelude” a further deepening of the recession.

And analysts agree. Speaking about the latest jobless rate, economist at Capital Economics Ben May said that “it's another example of the dire position the economy is in, and with the economy unlikely to expand anytime soon, and probably more likely to fall deeper into recession, things are only going to get worse.”

The Spanish economy has deteriorated since 2008 and the latest slump is expected to last well into 2013, with the government estimating unemployment to float at 22% at its best until at least 2015. Young people have especially been hit by the high jobless rate as EU statistics show that half of those aged under 26 are looking for work. 

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