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Surprise Fall In Spanish Unemployment

James Boston
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www.finances.com
Surprise Fall In Spanish Unemployment

One of the most debilitating aspects of the Spanish recovery is undoubtedly the elevated levels of unemployment that the economy is experiencing. This makes this mornings surprise drop in the rate all the more welcome. The latest figure relating the third quarter have just been announced as 23.67%, this is a marked improvement on the previous quarter’s 24.47% and easily beat the expected figure of 24.30%. Although Spain still maintains the second highest unemployment rate in the Eurozone, after Greece, today’s reading is the lowest in almost three years and marks an acceleration of the downward trend from a peak of close to 27% at the beginning of last year. The Jobs growth has come in the areas of Services, Industry and Construction with only the Agricultural sector registering a fall in employment.

The Spanish recovery has clearly been gathering pace since the beginning of this year, however like most countries it remains exposed to the global economy and this is likely to have affected growth in the past quarter. The Bank of Spain has announced that it now expects the third quarter GDP growth figure to come in at 0.5%, this would mark a slowing of the rate of expansion in the Spanish economy which posted 0.6% growth in the second quarter. Additionally, the Bank of Spain has put markets on notice that it could be downwardly revising it’s growth projections for both 2014 and 2015, these currently stand at 1.3% and 2.0% respectively. This will not substantially disappoint markets as these growth projections were only upgraded earlier this month. The upgrade was modest, from 1.2% and 1.8% this year and next, it also took observers by surprise as there was not a lot of data to suggest that the Spanish economy was out performing the existing growth rate.

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