Spain jobless rate edges down amid tepid recovery

AP News
Posted: Oct 24, 2013 6:54 AM
Spain jobless rate edges down amid tepid recovery

MADRID (AP) — Spain's high jobless rate edged down only modestly in the third quarter, to 26 percent, despite the country's emergence from a long recession and a good tourism season.

The unemployment rate for the July-September period fell from 26.3 percent to 26.0 percent, leaving the total number of jobless at a rounded 5.9 million, the National Statistics Institute said Thursday.

Spain's rate often goes down during the summer tourism season, and the country experienced a big tourism boost this year as travelers swarmed to the country, some spooked by the prospect of visiting countries like Egypt and Turkey because of social unrest.

Economists say it will take years to bring the jobless rate down to a more tolerable level. At a government unemployment office Thursday, people lined up to sign up for benefits said they had little hope of landing work anytime soon.

"It's always interviews and interviews but at the last hurdle they always say 'No, No,'" said German Sanchez, a 30-year-old economist. He's thinking of emigrating to Britain, where many young Spaniards have fled to for work.

Hundreds of thousands of students and teachers staged a nationwide strike to protest new education reforms and cutbacks brought in since Prime Minister Mariano Rajoy's conservative Popular Party government took office in 2011.

The Bank of Spain estimated this week that the economy grew by a quarterly rate of 0.1 percent in the third quarter, the first rise following nine consecutive quarters of decline. The government hailed the figure as proof its unpopular austerity measures and economic reforms are starting to pay off.

But the recovery, which has been led by exports, has so far not generated a large number of jobs.

The exports have mainly benefited large companies that had cut costs aggressively to become more globally competitive. Smaller companies, which account for more than half of the economy, are still hurting because of weak domestic demand and a virtual credit freeze that has prevented them from getting loans to expand business.

"Declines in the flow of new lending to small and medium-sized businesses have been steep since the onset of the crisis. Lending in Spain is down by 66 percent since the pre-crisis peak, compared to a European average of 47 percent," said John Ott, who heads the United Kingdom financial services practice for the Bain & Company consulting firm.


Associated Press writer Ciaran Giles and television producer Iain Sullivan in Madrid contributed to this report.