Spain Registered Unemployment Falls for 1st Month in FiveAngeline Benoit and Ben Sills
Spain’s registered unemployment fell for the first time in five months in December as service industries boosted hiring over the holiday season.
The number of people registering for jobless benefits fell by 59,094 from November to 4.8 million, the Labor Ministry in Madrid said today. That’s the best result on record for December.
The figures suggest an interruption in the retrenchment of the euro area’s fourth-largest economy, which the Organization for Economic Cooperation and Development predicts will shrink for a second straight year in 2013. Economists have forecast an index of service industry activity due to be published tomorrow will show a contraction in December.
“This is quite unique for a December,” Martin Van Vliet, an economist at ING Bank in Amsterdam, said in a telephone interview. “The recession could end in the second half but I’m not holding my breath. With the sheer scale of fiscal tightening in the pipeline I’m still a bit cautious.”
The number of service-sector workers registered as jobless fell by 49,438. At the same time, 4,325 more construction workers and 2,794 more manufacturing workers were unemployed.
Companies are seeking to reduce costs as the deepest austerity measures in the nation’s democratic history undermine domestic demand amid a recession that has spread to the 17-nation euro region. IAG is in talks with unions to shrink Spanish airline Iberia’s fleet by 4,500 jobs, while nationalized lender Bankia group pledged to axe 6,000 after securing European aid.
The OECD sees unemployment in Spain, already the highest in the European Union, reaching 27 percent this year.