Spain's unemployment rate inches up in fourth quarter

[MADRID] Spain's unemployment rate edged up slightly in the fourth quarter of 2014 to 23.7 per cent as the number of people out of work grew although more than 65,000 new jobs were added.

A sky-high unemployment rate - second only to Greece's in Europe - is still a major drag on an economic turnaround in Spain, with many households struggling to make ends meet and failing to feel the benefits of the recovery.

The jobless rate had been gradually dropping over the past year, after Spain came out of recession and as the worst of a financial crisis and property market crash fades.

There are still more than 5.4 million people out of work, according to a survey from Spain's National Statistics Institute INE on Thursday, some 3.5 million more than when the prolonged downturn began seven years ago.

But employment grew by nearly 434,000 in 2014 - the best year for job creation since the start of the slump - while there were 477,900 fewer people out of a job.

"We expect employment creation to continue, though perhaps at a slower rate than in 2014 as strong growth was partly due to pent-up demand for labour," said Victor Echevarria, economics analyst at Spanish financial consultancy Analistas Financieros Internacionales (AFI).

The number of people without a job rose by 30,100 in the fourth quarter compared with the previous three months although 65,100 jobs were added and the total workforce rose by nearly 100,000 people.

Taking into account people leaving the active workforce, for example by retiring or emigrating, the unemployment rate inched up from 23.67 per cent compared with the previous three months.

"Some of the discouraged workers that came out of the labour force are coming back now and looking for a job so, from that point of view, it's a positive," Mr Echevarria at AFI said.

REUTERS