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Spain's jobless total rises though economy picks up

Spain's jobless total rises though economy picks up
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Spain’s already high unemployment rate inched higher in the final three months of last year, even as the economy showed signs of picking up.

The number of people out of work fell at the end of 2013 from a year earlier. But more than a quarter of a million people left the workforce during the year, meaning the jobless rate rose slightly.

Outside a Madrid job centre one woman lamented: “My brother got a job in December after being unemployed for three years. But 40 percent of work contracts in December were temporary. I’m out of work too. People are definitely not seeing any improvement.”

Even as many long-term unemployed have given up looking for work, the overall jobless rate rose to 26.03 percent of the workforce. It was up from 25.98 percent in the previous quarter. More than 55 percent of young Spaniards are on the dole.

Almost a quarter of all the unemployed in the 28-country European Union live in Spain, while well over half of Spain’s jobless are considered long term having been out of work for more than a year.

The number of Spanish homes in which all members eligible to work cannot find a job rose in the fourth quarter to 1.8 million.

Away from the job centres it is possible to find optimists. Javier Urones, an analyst with X-Trade Brokers in Madrid, said: “We believe we’re going through a stabilisation process in the jobless numbers. Yes, there are still close to six million people out of work, but even so we see signs of improvement. We think there will be net job creation in 2014 and it will be a good year for job creation.”

Spain’s central bank said there were some hopeful signs in the job market. In the fourth quarter of 2013, the number of employees paying into the social security system rose 0.4 percent from the third, the first rise since early 2008, driven by the services sector and agricultural jobs.

The Bank of Spain also believes the economic recovery is gaining traction.

On Thursday the bank’s experts said they think gross domestic product rose 0.3 percent on a quarterly basis between October and December 2013.

The Madrid government is forecasting growth of 0.7 percent this year and Prime Minister Mariano Rajoy has pledged households will soon feel the effects of the turnaround.

This all comes as Spain formally exited a bank bailout programme under which it got a 41 billion euro loan from its European partners.

However, banks’ assets continue to deteriorate with an increase in the number of loans not being paid back.