Spain's jobless rate rises, 6 million unemployed for first time

With over 6 million unemployed for the first time ever, Spain's jobless rate shot up to a record 27.2 percent in the first quarter of 2013, the National Statistics Institute said Thursday, in another grim picture of the recession-wracked country.

The agency said the number of people unemployed rose by 237,400 people in the first three months of the year, a 1.1 percent increase from the previous quarter. The total out of work stood at 6.2 million people, the first time the number has breached the 6-million mark.

Unsurprisingly, the details of the report make for grim reading.

The number of people considered long-term unemployed — out of a job for more than a year — increased to 3.5 million while the unemployment rate for those aged under 25 was a staggering 57 percent. The government body also said its survey found the number of households without any one working had risen by 72,400 to a 1.91 million.

"The situation is really bad, with all the cuts that there have been, there are families that are going through a bad time because a lot of families have all the members unemployed and they don't have any income," said shop assistant Rodrigo Limpias , 30.

Labor Ministry employment secretary Engracia Hidalgo described the figures as "dramatic" but said the government was working non-stop to try make Spain a job creator once again.

Spain has been in recession for much of the past four years as it struggles to deal with the collapse of its once-booming real estate sector in 2008. In the previous decade its economy was thriving, generating millions of jobs.

In just over a year in office, the conservative government has launched a series of financial and labor reforms and pursued a raft of spending cuts and tax increases that have managed to reduce a swollen deficit. Even so, the country had the highest budget deficit among the 17 European Union countries that use the euro in 2012.

"This is getting worse every day. (The government) has no solution, there are more and more people unemployed and we don't have enough to eat," said Maria Carmen Huerta, 55, an unemployed IT worker.

Prime Minister Mariano Rajoy has acknowledged that 2013 will be a bad year but insists that it would have been worse without the reforms. The International Monetary Fund indicated last week that Spain's economy will contract by 1.6 percent this year.

The government is predicting that Spain will return to growth, which should help the labor market. Rajoy has promised reforms to be presented Friday that will "make the economy more flexible, more competitive and will turn those predictions around."

Opposition parties said the unemployment figures highlight how Rajoy's austerity policies are damaging the economy.

"6 million people unemployed is 6 million reasons for the government to withdraw the labor reform and change its economic policy," said Oscar Lopez of the leading opposition Socialist party.

But the EU's top economic official, Commissioner Olli Rehn said "Spain should maintain the reform momentum by including comprehensive and concrete policy measures" in its programs.

He said that "despite significant progress in 2012, there are still excessive macroeconomic imbalances" with high domestic and external debt continuing to pose risks for growth and financial stability.