Spanish unemployment falls again, but economic outlook is dimmer

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Spanish unemployment falls again, but economic outlook is dimmer

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Spain’s unemployment rate fell to its lowest in almost three years between July and September.

It slipped to 23.7 percent from 24.5 percent in the previous quarter, as the key services, industry and construction sectors expanded, while agriculture recorded a fall.

Analysts said the numbers showed Spain’s economy is now capable of creating jobs, even at moderate growth levels

But its jobless rate is still the second highest in the eurozone behind Greece and a major drag on the country’s recovery.

At the same time the Bank of Spain warned economic weakness abroad – particularly in the eurozone – is threating that recovery.

The central bank expects growth to have slowed to 0.5 percent quarter on quarter between July and September.

It also warned that forecasts of growth of 1.3 percent this year and 2 percent in 2015 were increasingly under threat.

“Downside risks to this central scenario have accentuated in the last few months due to a worsening of the international outlook.” the Bank of Spain said in its quarterly report.

Eurozone businesses performed much better than expected in October but did so by slashing prices, while optimism about the future fell to its lowest level in over a year, surveys showed.

with Reuters