Spain's jobless numbers up in October, no relief in sight

Reuters

* Registered jobless rise by 87,000 as tourism hires laidoff

* EU sees unemployment rate above 25 pct for two more years

* Spain's economy growing again, but not adding jobs

By Sarah Morris

MADRID, Nov 5 (Reuters) - Spain's registered jobless rose inOctober as tourist season hires were laid off, suggesting anexpanding economy has yet to make inroads into an unemploymentrate EU authorities expect to stay above 25 percent through2015.

The number of registered jobless rose by 87,028 people,leaving 4.81 million out of work, adjusted data from the LabourMinistry showed on Tuesday. The increase was especiallypronounced in the services and agriculture sectors.

Year on year, jobless numbers fell for the first time sinceMay 2007, data the government said showed the economic recoverywas gaining a foothold. Gross domestic product rose for thefirst time in ten quarters in the three months to September,albeit by just 0.1 percent.

Spain's economy has contracted around 7.5 percent since2008, when the bursting of a decade-long property bubble leftmillions out of work and sent domestic demand into freefall.

The rebound, led by the export sector, is expected to beshallow, due in part to the stubbornly high unemployment as wellas one of the euro zone's highest deficits.

The Ministry's monthly jobless data uses a differentmethodology to the National Statistics Institute's quarterlysurvey. The latter, considered a better guide to the totalnumber of people out of work, showed unemployment at 26.0percent in the third quarter.

In macroeconomic forecasts for euro zone countries publishedin Brussels on Tuesday, the European Commission said it expectedSpain's unemployment rate to inch up to an average of 26.4percent in 2014, dropping only marginally to 25.3 percent in2015.

"Unemployment is projected to fall gradually... as thelabour force continues to shrink and employment destructionreaches a turning point in the course of 2014," the Commissionsaid in a statement.

Meanwhile, the economic revival would gather pace, with GDPgrowing by 0.5 percent next year and 1.5 percent the year after,the commission said. Authorities in Madrid forecast growth ratesof 0.7 percent and 1.2 percent, respectively.

The Commission said Spain's fiscal deficit could widen to6.6 percent of GDP in 2015, worse than the target of 4.2percent, meaning the country could be forced to make further taxhikes or budget savings.

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