Spanish jobless rate soars to near 15-year high

Spain's jobless rate soared to a 15-year high of 21.52 percent in the third quarter of 2011, data showed on Friday, a stinging blow to the government three weeks ahead of elections. The towering unemployment rate, up from 20.89 percent in the previous quarter, is the highest since the end of 1996 and the highest among major industrialised nations. Among 16-24 year olds, the rate was a staggering 45.8 percent, barely down from 46.1 percent three months earlier. The overall unemployment queue grew to 4.978 million people at the end of September from 4.834 million at the end of June, National Statistics Institute figures showed. The figures make grim reading for a Socialist government already facing the prospect of a drubbing in November 20 elections at the hands of the conservative opposition Popular Party. High unemployment and a series of painful spending cuts to rein in runaway government budgets have provoked widespread resentment and sparked a nationwide "indignant" protest movement. Finance Minister Elena Salgado defended the government's record on employment.  "What people say, including in the recommendations over the European Council, is that Spain must adopt measures to favour growth and create employment," she told Cadena Ser Radio. "And that is what we are working on, by carrying on with a process of changes in our economy which will make us more competitive and make an economy that generates more employment." The Spanish economy slumped into recession in the second half of 2008, battered by a global financial meltdown and the collapse of a property bubble, which threw millions out of work. Economic growth has been anaemic ever since. Analysts widely expect an economic expansion of about 0.8 percent this year partly because of the number of people excluded from economic activity. About 3.2 million people had been added to the jobless queue since the crisis began four years ago and it would take a long time to absorb them, IE Business School analyst Juan Carlos Martinez Lazaro said. The latest figures showed the number of homes in which everyone was unemployed rose 57,000 to 1.425 million homes. "It is a factor that could have a big effect on social stability," Martinez Lazaro warned. Before summer, the government had been hoping for improved figures ahead of the election, he said. "In the end we have the exact opposite, it confirms the deterioration of the Spanish economy." The latest figures also were a reminder of the challenges ahead for the eurozone, a day after markets welcomed an agreement struck by European leaders to tackle the region's sovereign debt crisis. The European deal will wipe out 100 billion euros ($140 billion) of Greece's debts, reinforce commercial banks' capital defences and deliver a huge boost to a sovereign bailout fund. In announcing a euro summit agreement, the leaders' statement included a warning that Spain must stimulate growth so as to reduce the "unacceptable" level of unemployment. In particular, they urged Spain to make companies more flexible, to make workers more employable and to improve competitiveness especially with reforms to the services sector. Spain's government earlier this year revised upwards its 2011 unemployment rate forecast to 19.8 percent from 19.3 percent. But even the official government figures foresee high jobless rates for years to come: 18.5 percent in 2012, 17.3 percent in 2013 and 16.0 percent in 2014. Besides the problems of high unemployment and weak economic growth, provisional figures Friday showed Spain faces stubbornly high inflation with an annual rate of 3.0 percent in October, unchanged from September.