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UPDATE 1-Spain's December jobless rate sinks, recovery still muted
January 3, 2014 / 10:06 AM / 4 years ago

UPDATE 1-Spain's December jobless rate sinks, recovery still muted

MADRID, Jan 3 (Reuters) - The number of registered jobless in Spain fell by 2.24 percent in December, adding to evidence of a gradual economic recovery though seasonal factors played a role in what was the biggest drop ever for the month.

The jobless total fell by 107,570 people, leaving 4.7 million people out of work, Friday’s Labour Ministry figures showed. The drop was also the second biggest since the data series began.

It was also the best December since 2001 for numbers of newly employed workers registering for social security contributions, Tomas Burgos, Social Security Secretary, told reporters. “(This) is not a coincidence, but rather reflects a series of circumstances which inspire confidence.”

A separate quarterly survey by the statistics institute INE, which polls those who are looking for work rather than those who sign on at unemployment offices and is considered more representative of the labour market, put the rate at 26 percent in the third quarter.

Spain’s economy is struggling to gain momentum after a recession that followed the collapse of a housing bubble in 2008 which left banks, households and companies saddled with debt.

Economy Minister Luis de Guindos said earlier this week that job creation in 2014 would be “significant” as a tentative economic recovery kicks in, but did not specify further.

Investors are also hopeful Spain’s deep-seated economic problems are beginning to ease, and the market spread between the interest on the country’s 10-year debt and that of euro zone benchmark Germany fell below 200 basis points for the first time since May 2011 on Friday.

But analysts responded cautiously to Friday’s data, with one factor in the strong reading likely to have been the extra hands taken on at retailers expecting a slightly better Christmas shopping period, which in Spain ends with gift-giving on January 6.

“It’s encouraging but it’s still early to breathe a sigh of relief. The data may well be seasonal, and the worry is that the improvement may reverse in January,” said Steve Webster, economist at 4Cast, noting that the overall rate was still very high.

At the start of December, Spanish retailers announced they would be employing 5 percent more people, or 18,000 workers, for the Christmas period compared with the previous year.

A flood of job seekers crashed Ikea’s Spanish servers twice in December after some 20,000 people applied for just 400 positions at the Swedish furniture retailer’s new store in Valencia.

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