“The figures for the number of registered unemployed for the month of December confirm the deterioration of the economic situation during the second half of the year,” the labour ministry said in a statement.

The ranks of the unemployed rose in December from the previous month by 1,897 people, or 0.04 percent, and by 322,286 people, or 7.86 percent, from the same year-ago period.

Spain, once the motor of job creation in the eurozone, has struggled to find jobs for the millions thrown out of work by the collapse of a labour-intensive property bubble in 2008.

The rising jobless numbers add to the huge challenges facing Spain’s new conservative government, which has vowed to make fighting unemployment and fixing the country’s finances its top priorities.

It plans to present a major labour market reform this month which will change hiring laws and the collective bargaining system to try to encourage the hiring of workers.

Spain’s welfare system only allows workers to receive unemployment benefits for a maximum of two years.

But Prime Minister Mariano Rajoy’s government on Friday extended a monthly payment of 400 euros ($520) for people whose benefits have run out. The payments had been due to expire in February.

Rajoy was sworn in as prime minister on December 22 a month after his Popular Party won a general election in a landslide, putting an end to nearly eight years of Socialist rule.

The National Statistics Institute, which uses a different method of calculation to the labour ministry, says the number of unemployed rose to 4.978 million people in the third quarter from 4.834 million in the previous three months.

According to those figures, the Spanish unemployment rate soared to a 15-year high of 21.52 percent in the third quarter, the highest among major industrialised nations.