Spain: Unemployment steady in Q4
January 23, 2014
The unemployment rate remained unchanged at Q3's 26.0% in Q4, which was in line with market expectations. In absolute terms, the number of unemployed reached 5.90 million in the fourth quarter, which was broadly unchanged compared to the 5.91 million recorded in the previous period. In Q4, the country's workforce dropped by 73,500 people to 22.65 million, which marked the lowest level of unemployed since Q1 2008. Spain's workforce continues to decline as immigrants and nationals leave the country, dashing hopes of a prompt recovery in the job market.
The economy lost 65,000 jobs in Q4. The services sector recorded the largest drop with a loss of 109,100 jobs. The number of jobs in the industry (-6,000) and construction (-32,500) sectors also decreased, whereas the agriculture sector recovered 85,200 jobs.
High unemployment will continue to impact the economy, hampering private consumption in the near future and putting additional pressure on the already-strained government to pay unemployment benefits. The dramatic situation in the labor market also translates into reduced revenues in the government's coffers, thus contributing to concerns regarding the long-term sustainability of the country's pension system.
The government expects unemployment to average 25.9% in 2014. FocusEconomics Consensus Forecast participants expect unemployment to average 26.1% in 2014, which is down 0.1 percentage points over last month's projection. For 2015, the panel sees the unemployment rate at 25.4%.