Jobless rate jumps as property boom ends

28 January 2008

MADRID – Unemployment in Spain rose in the last quarter of the year, confirming a slowdown in the economy as a massive property boom petered out.

The National Statistics Institute (INE) said Friday that the jobless rate in the last three months of 2007 rose to 8.60 percent from 8.03 percent the previous quarter as the number of people out of work climbed by 135,700 to 1.927 million

The construction sector, which has been one of the motors of over a decade of uninterrupted economic growth, shed 61,500 jobs last year. The total number of jobs lost amounted to 33,700, the biggest quarterly fall since 1994 when Spain was emerging from a recession.

Annual growth in Spain’s GDP in the last three months of 2007 is estimated to have slowed to 3.5 percent from 3.8 percent the previous three months.

The growth target for this year is 3.1 percent, but analysts believe that is over-ambitious in the light of the global credit crunch and the threat of recession in the United States.

The secretary of state for the economy, David Vegara, said the rise in the number of people out of work was in line with the gradual slowdown in the economy. He noted that the job creation rate last year remained over 2 percent.

The economy has come to the forefront of political debate ahead of general elections slated for 9 March.

Subject: Spanish news