The Spanish government said Tuesday that an unexpected drop in unemployment in May was one of the best pieces of economic news since the start of the crisis, but the data showed that temporary hires accounted for much of it.
The number of people registered as unemployed declined by almost 2 percent, or 98,265 people, compared with the previous month, according to government statistics. Stripping out seasonal hires in areas like tourism and agriculture, the number of unemployed only dropped by 265 people.
Roughly 6.2 million people are out of work in Spain, and unemployment stands at about 27 percent.
The data suggest that Spain is increasingly turning into a two-tier labor market, as some employers hire people back on cheaper short-term contracts while the work force on permanent contracts, already at its lowest level since 1997, continues to fall.
Still, José Manuel Soria, the industry minister, welcomed the data as “the best we have seen since the crisis started.” Prime Minister Mariano Rajoy said that the “good news” on the unemployment front vindicated the government’s economic policy as “the adequate one,” even as austerity measures have led to mass street protests and have seen Mr. Rajoy’s popularity reach a record low.
Spain has been on the front line of the euro debt crisis for two years, and the deteriorating economy has pushed unemployment to more than double the European Union average. Last week, the Organization for Economic Cooperation and Development forecast that Spain’s jobless rate would continue to rise and surpass 28 percent in 2014. Most economists also expect unemployment to peak around that level amid weakening domestic consumption caused by a prolonged recession and a credit squeeze that continues to hurt businesses.
Chosen excerpts by Job Market Monitor
Spain’s unemployment rate has climbed to a new record of 27.16 per cent in the first quarter of 2013, as a deep recession sparked by the collapse of a property bubble ravages the eurozone’s fourth-largest economy. The jobless rate jumped from 26.02 per as the number of unemployed climbed by 237,400 people to 6.2 million, … Continue reading »
Europe’s lost generation / Youth unemployment exceeds 60 percent in Greece, is above 50 percent in Spain and tops 40 percent in Portugal
Children across Europe are being driven into poverty by harsh government austerity and youth unemployment is soaring, threatening to create “lost generations” that could fire up a new continental crisis. Global charity Caritas said on Thursday that around three out of every 10 children in Greece, Ireland, Portugal, Italy and Spain are in or have … Continue reading »
A common notion circulating inside and outside Spain is that over half of young Spaniards (aged 16-24) are unemployed –a ‘fact’ which furthers the image of deep crisis in Spain. The world’s most prestigious media report on such youth unemployment with alarm, contributing to this new ‘Black Legend’ of Spanish failure. The truth, however, is … Continue reading »
In 2007, Spain and Greece had lower unemployment rates than the euro area as a whole. In their article, Thomas Klitgaard and Ayşegül Şahin ”show that while the unemployment rates in the two countries are similar today, the paths have been very different.” (Choosen excerpts by Job Market Monitor to follow) The employment decline in Greece, like … Continue reading »