Forex »

Surprise Increase In Spanish Unemployment Numbers

James Boston
Share on StockTwits
Published on
www.finances.com
Surprise Increase In Spanish Unemployment Numbers

The recent unexpected drop in the Spanish unemployment rate may be a somewhat short lived phenomena if the latest Unemployment Change numbers are anything to go by. Data just released for the month of October is showing a surprise rise in the unemployment numbers, this latest reading has produced an increase of 79.2k in the numbers claiming to be unemployed, this is a significant increase on the September figure of 19.7k and well above the anticipate 23.4k rise.

To put this 79.2k rise in unemployment figure in context it is worth considering that surprise drop in official unemployment rate published last month was from 24.5% to 23.7%, this represented just short of 200k individuals leaving the unemployment register. In this regards the magnitude of today’s rise in the unemployment change figure has the potential to take the unemployment rate back above the 24% level at it’s next measurement for Q4 due in December. There is no doubt scope for improvement over the next two month’s that could see this situation averted but there is seemingly a lot of ground to make up which would require a net drop in the unemployment figures in both November and December in order to make up the gap.

Spain currently has 5.4m unemployed people, closer to 5.5m after today’s announcement, and the government plans to reduce this number to closer to 4.7m by the end of 2015. This is still an entirely possible outcome as this latest reading represents just one month’s data and is not yet a defined trend. Additionally, there is a significant seasonality aspect to the Spanish labour market, Spain has a significant tourism sector which greatly winds down between September and October and therefore a spike in the numbers signing onto unemployment benefit at this time of year is not unusual, this issue is the magnitude of that spike and the fact that in this case it was almost four times expectations.

Share on StockTwits