Tags: EU | Spain | Financial | Crisis

Spanish Unemployment Surges as Inflation Rises

Friday, 29 Apr 2011 10:30 AM

Weak jobs and retail data together with rising inflation on Friday undermined Spain's efforts to revive a stagnant economy already beset by rampant unemployment, high prices and depressed consumer sentiment.

Unemployment, which is more than double the European Union average, rose to 21.3 percent, or 4.9 million people, in the first quarter from 20.3 percent a quarter earlier, the National Statistics Institute (INE) said.

The government says unemployment will end the year at an average of 19.8 percent as a return to economic growth begins to create net jobs in the second half of 2010, but the Bank of Spain is less optimistic, seeing the rate at over 20 percent into next year.

"Hopefully this marks the peak of unemployment. I don't think the situation will improve dramatically in the next few quarters but it should at least stabilize," economist at Unicredit Tullia Bucco said.

The unemployment rate rose as the active workforce shrunk to 18.2 million, down 1.3 percent from a year earlier.

Spain's economy tipped into recession mid-2008 after a burst property bubble hit domestic demand and sent the key construction and services sectors tumbling and prompting mass layoffs, more than doubling the number of people out of work.

Despite emerging from recession at the start of 2010, the fallout from the collapsed building industry and persistent consumer caution has left the economy near stagnant, and it is likely to remain depressed due to a continuing credit crunch.

March retail sales fell 8.6 percent year-on-year on a calendar-adjusted basis in March, after an adjusted fall of 4.3 percent in February, official data showed, the sharpest decline since February 2009 and the ninth consecutive month of falls.

Meanwhile, Spanish EU-harmonized consumer prices index rose to 3.5 percent year on year in April, preliminary data showed, the highest level since October 2008 and compared to 3.3 percent year-on-year in March.

The preliminary national consumer price index rose 3.8 percent on an annual basis compared to 3.6 percent a month earlier. INE reports final consumer price data May 12.

© 2017 Thomson/Reuters. All rights reserved.

 
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Weak jobs and retail data together with rising inflation on Friday undermined Spain's efforts to revive a stagnant economy already beset by rampant unemployment, high prices and depressed consumer sentiment. Unemployment, which is more than double the European Union...
EU,Spain,Financial,Crisis
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2011-30-29
Friday, 29 Apr 2011 10:30 AM
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