Spanish Jobless Claims Slow, Boosting Rajoy Recovery

Spanish jobless claims slowed in February, lending support to the government’s view that the country has overcome the worst of a six-year slump.

The number of registered unemployed rose by 59,444 from the previous month, less than half the increase in January, to 5.04 million, the Labor Ministry in Madrid said in an e-mailed statement. That’s the best February performance in five years.

Prime Minister Mariano Rajoy is trying to persuade Spanish voters and European Union officials he can get the economy back on track after overshooting his budget-deficit target by more than 50 percent in 2012. The EU last month predicted Spain’s contraction will be almost three times the government’s 0.5 percent forecast.

European Central Bank President Mario Draghi has said restarting the euro-region economy is his biggest challenge in 2013 after stabilizing the bloc’s financial system last year by pledging to defend the euro. Output from the 17-nation currency union will shrink by 0.3 percent this year, the EU forecasts.

“The worst of the threat is passing into memory,” Rajoy told the Spanish parliament last month. “We have other challenges to face, but they will not be so grave.”

Deputy Economy Minister Fernando Jimenez Latorre last week said Spain’s recession will moderate in the first three months of the year. Output fell by 0.8 percent in the last quarter of 2012, the most in four years.

Still, the Bank of Spain last week said the recession is extending into the first quarter amid weak domestic demand. Export growth slowed in the last quarter while tourism slowed in recent months, it said. The number of tourist visits fell 2.6 percent in January from a year earlier.

The country’s record jobless rate will climb to 27 percent this year, the EU forecast last month. A third of all unemployed in the euro region are in Spain.

To contact the reporters on this story: Angeline Benoit in Madrid at abenoit4@bloomberg.net; Ben Sills in Madrid at bsills@bloomberg.net

To contact the editors responsible for this story: Craig Stirling at cstirling1@bloomberg.net; James Hertling at jhertling@bloomberg.net

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