Spain’s Unemployment Rate Falls to More Than Six-Year Lowby
Surge in services jobs pushed the jobless rate to 18.9%
Acting Prime Minister Rajoy may form a government this week
Spanish unemployment fell to the lowest in more than six years, led by a surge in services jobs as Acting Prime Minister Mariano Rajoy moves closer to forming a government after a 10-month political deadlock.
The jobless rate dropped to 18.9 percent in the three months through September, the National Statistics Institute said in Madrid Thursday. That’s down from 20 percent in the second quarter and compares with a Bloomberg survey of economists predicting a decline to 19.3 percent for the quarter. The number of Spaniards out of work fell to 4.3 million total for the quarter compared to a crisis record of 6 million in 2013.
The new figures will provide a boost for Rajoy, who is likely to take office this week for a second time after the Socialist party, the second biggest force in parliament, dropped a veto blocking his bid. The 61-year-old is expected to be named Prime Minister after a confidence vote on Saturday, ending the impasse after 10 months without a government.
Over the past year, the Spanish economy added 478,800 new jobs, the INE said, as it shrugged off political uncertainty to continue growing and benefited from a surge in tourism. Visitors have been shunning other Mediterranean destinations amid safety concerns. The services sector led the way for job creation, adding about new 178,700 jobs while industry and construction grew at a lower pace and agriculture jobs fell.
Even so, Spain’s unemployment rate remains the second-highest in the EU only after Greece and often relies on short-term contracts that offer little job security. Of the total jobs created in the quarter, about 245,900 were short-term contracts, while just 29,100 were permanent. While Rajoy has been credited with boosting job creation, opposition parties have criticized it for not doing enough to promote better quality hiring. His administration has made employment a policy centerpiece, promising to create 2 million new jobs by 2020.
Preliminary figures due Friday should show the Spanish economy expanded 0.7 percent the third quarter, according a Bloomberg survey, a small decline from the previous quarter when it grew 0.8 percent. Consumer prices on an EU-harmonized basis are seen accelerating 0.3 percent in October from a year earlier.