In World Economy News 06/01/2016
The number of Spaniards registered as unemployed fell by 55,790 in December, decreasing for a second month as businesses hired staff for the Christmas period, adding credence to Acting Prime Minister Mariano Rajoy’s job creation pledges.
The decline was higher than the 50,000 drop forecast by economists in a Bloomberg News survey. On a seasonally adjusted basis, the number of unemployed fell by 1,258, the Labor Ministry said in an e-mailed statement Tuesday. Overall, joblessness declined by 354,203 on an annual basis.
Social security sign-ups — a measure of new staff hiring — rose by 85,314, the biggest increase on record, the ministry said. From a year ago, the number of Spaniards with a job rose has risen by 533,186 taking the total to 17 million. Reacting to the figures, Rajoy said while the trend has changed for the better, there’s still more to do.
“There are fewer unemployed people now than when we arrived to government and social security sign-ups have been rising for two years,” he said in an interview on COPE radio, adding that the “best” outcome for the recovery to continue is for Spain to form a stable government led by his People’s Party.
Political Turbulence
Adding to a string of positive data, the Bank of Spain said in an early estimate published Dec. 22 that it expects the Iberian economy to grow 0.8 percent in the fourth quarter, defying fears of a slowdown.
Despite the supportive indicators, Spain is heading for political turbulence
after a Dec. 20 election vote produced an inclusive result, leaving Rajoy few options to form a government despite winning the most votes. An extended period of uncertainty could damp economic sentiment and delay investment decisions, according to Geoffrey Minne, an economist at ING Bank in Brussels.
“A potential gridlock could lead to higher Spanish bond yields, but could also be a drag on consumer and business confidence,” Minne said.
