* Unemployment rate 26 percent in third quarter
* Some 5.9 million out of work in Spain
* Economists concerned that new job creation remains elusive
By Paul Day
MADRID, Oct 24 Spain's unemployment rate fell in
the third quarter from the second, data showed on Thursday, with
a busy tourist season giving a lift to the country's dire labour
The unemployment rate between July and September was 26
percent, compared to a Reuters poll of 26.1 percent and 26.3
percent a quarter earlier, with some 5.9 million people out of
work, the National Statistics Institute said.
The figures also showed the number of people holding jobs
rose to 16.8 million, the second straight quarterly increase
though still a long way from the 20.4 million who were in work
at the beginning of 2008.
Joblessness has soared in Spain since a property bubble
burst in 2008 and the country entered a five-year economic
Just under a third of all people out of work in the euro
zone live in Spain, which has the second-highest unemployment
rate in the 17-country bloc after Greece.
A strong tourist season, with political unrest deterring
many sunseekers from visiting North Africa and the Middle East,
has helped boost Spain's labour market over the summer, though
this effect is likely to peter out by the fourth quarter.
The government has hailed a probable return to growth in the
third quarter as the beginning of the end of the economic crisis
and said it expects net job creation by 2014.
Market confidence has also grown.
The country's blue-chip IBEX share index has risen around 20
percent in the first ten months of the year, and earlier this
week, Microsoft co-founder Bill Gates joined other
foreign investors in buying significant stakes in Spanish
But the fragile recovery is dependent on a booming export
sector while domestic demand continues to shrink, triggering
concerns that a sustainable reduction in the unemployment rate
may take years.
"Growth will come from sectors less labour-intensive than
the construction sector and, per unit of growth, you're going to
generate less employment," said Ruben Segura-Cayuela, an
economist at Bank of America/Merrill Lynch.
"But you also had a labour market reform and the job
creation threshold now is economic growth of something between
1.0 and 1.5 percent. That means that even in the most optimistic
scenario, we're not seeing net job creation next year."
Spain's government expects the economy to grow 0.7 percent
in 2014 after contracting 1.3 percent this year.
Spanish companies, including household names, are still
going bankrupt at a record rate, adding to already straining
Last week, consumer appliance company Fagor filed
for protection from creditors as it struggles to refinance its
debt, putting almost 6,000 jobs at risk, while problems at
doughnut baker Panrico have put some 2,000 more in jeopardy.
Many economists point out that finding suitable jobs for
Spain's legions of long-term unemployed will be hard, while the
gap between difficult-to-fire workers holding permanent
contracts and those on temporary deals with few rights keeps
According to Thursday's data, some 3.2 million unemployed
have been out of work for a year or more, while there are just
over 1.8 million households in which all its members are
unemployed, fuelling deepening inequality.