Spanish Unemployment Rises for Fifth Straight Month as Economy Contracts

Registered unemployment (SPUECHNG) in Spain, where almost half of young people are out of work, rose for a fifth month in December as the euro area’s fourth-largest economy contracted.

The number of people registering for unemployment benefits rose 1,897 to 4.42 million, the Labor Ministry in Madrid said in an e-mailed statement today. In November, it surged 59,536.

Spain’s economy contracted in the final months of the year as tourism and exports, the drivers of its first-half recovery from a three-year slump, weakened, the Bank of Spain said on Dec. 29. Labor Minister Fatima Banez met union leaders and employers last week. Prime Minister Mariano Rajoy asked both sides to reach agreement by around Jan. 6 on changes to collective wage-bargaining rules and ways to resolve labor conflicts outside the courts.

“The data confirm the deterioration of the economic situation in the last half of 2011,” State Secretary for Employment Engracia Hidalgo told a news conference in Madrid. The report also showed the failure of the labor-market overhaul implemented by the previous Socialist government, she said.

Available data also show Spain’s social-security system won’t post a surplus in 2011, contrary to the previous government’s forecast, the state secretary for social security, Tomas Burgos, said at the same event.

To contact the reporter on this story: Angeline Benoit in Madrid at abenoit4@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net

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