“The worst labor market” on the planet: unemployment exceeded 20% in three downturns over the past 35 years.
Spain’s unemployment rate ticked up by a quarter percentage point to 14.7% in the first quarter of 2019, when economists had expected a down tick, as the number of people claiming unemployment benefits increased by 50,000 to 3.35 million, according to data released by the National Statistics Institute (INE). Although it’s not unusual for unemployment in Spain to tick up during the first quarter, this is the biggest quarter-on-quarter increase in six years and it highlights a persistent weak link in an economy that has done nothing but grow since late 2013.
The biggest job losses were registered in the services sector (69,000), followed by industry (8,600) and construction (2.500), raising concerns that the generalized economic slowdown affecting the European economy has spread to one of the region’s fastest growth engines. There are also fears that the recent slowdown of Spain’s tourist boom could lead to a larger cull of local jobs than usual this year.
But there are still some silver linings. Economic growth in Spain may have slowed in recent quarters but it’s still chugging along at an annualized rate of around 2.4%, among the highest growth rates in the Eurozone. And while unemployment may have grown in the first quarter of 2019 at the fastest rate since 2013, the Spanish economy did manage to create 596,900 jobs over the previous 12 months, the highest figure of job creation for a one-year period since the summer of 2007, before the start of the economic crisis. And things are clearly better than they were six years ago when official unemployment in Spain was an eye-watering 26%…