Jan 23 - Spain's already high unemployment rate inched up in the fourth quarter hindering its fragile economic recovery. On the same day the euro zones private sector reported strong growth. Melanie Ralph looks at where Europe is heading over the next few months.
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There's been another increase in the number of Spanish people looking for a job.
And the long-term outlook remains bleak with questions over the quality of the few new jobs that are being created.
(SOUNDBITE) (Spanish) UNEMPLOYED WOMAN, SANDRA, SAYING:
"Forty percent of contracts in December were temporary, amongst them my brother's who has been unemployed for three years. I haven't been on the dole that long but people on the street definitely don´t see any improvements."
With the economy picking up some analysts are confident the tide will soon turn.
(SOUNDBITE) (Spanish) BROKER AT X-TRADE BROKERS, JAVIER URONES, SAYING:
"We believe we are going through a stabilization process in the jobless numbers. There are still close to six million people out of work, but we see signs of improvement."
There were also signs of improvement in the overall euro zone economy.
While China's manufacturing industry contracted, Europe's private sector businesses jumped to their highest level for two and half years.
France remains a worry, shrinking for a third month, but generally recovery's on track.
JP Morgan's global strategist David Shairp
(SOUNDBITE) (English) J.P.MORGAN, GLOBAL STRATEGIST, DAVID SHAIRP, SAYING:
"I think the good news is we're through the worst of the recession and we're seeing signs of recovery. I think we'll probably see growth averaging around 1 percent this year."
That's nowhere near China's 7 percent
But, if the euro zone can continue to stomach austerity measures and tighter debt targets, there is cause for some optimism.
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