Spain: Unemployment hits 13-year high
January 28, 2011
In the fourth quarter, the unemployment rate rose to 20.3% (4.7 million people), which was up from 19.8% in the third quarter and represented the highest level since the third quarter of 1997. In addition, the unemployment rate was slightly above the 20.0% year-end government forecast from September. In the last quarter of 2010, the economy lost 138,600 jobs, as higher taxes and cuts to government spending dented job creation efforts. Job losses in both the services and construction sectors drove the unemployment figure higher, while the agricultural and industrial sectors added jobs. The job losses follow on two consecutive quarters of net job creation, dashing hopes that the job market has left the worst behind. The government expects the labour market to improve and the unemployment rate to fall in the second quarter 2011. On 27 January, the government announced an agreement with labour unions on increasing the retirement age from the present 65 to 67, one of the highest in Europe, as it tries to reassure markets of its commitment to reform the economy and cut the fiscal deficit. The pension reform will be phased in over 14 years, starting in 2013.