Spanish Employment Data Improves
In follow up to yesterday’s Eurozone unemployment data which showed a slight improvement from 12% to 11.9%, we now need to look at the various individual economies to ascertain where the improvement is coming from. Already in evidence is a minor improvement in German employment numbers with the rate of unemployment falling from 6.8% to 6.7%, this is a core Eurozone economy, the real employment issues reside with the periphery economies.
By way of insight, the Spanish government has just published their March Unemployment Change figures. Last month revealed that 1.9k individuals were removed from the unemployment data, figures just published for this month are showing a further significant improvement at 16.6k people leaving the unemployment support system.
In order to keep this figure in perspective it has to be noted that there are currently 4.6M people unemployed in Spain.
The Spanish economy is the 13th largest in the world and the fourth biggest in the Eurozone. It is also one of the more troubled of the large European economies. Overall the long-term unemployment rate is running at over 13% and this has been steadily rising since the 2008 base rate of 1.7%.
To further compound Spain’s problems, according to the latest GDP figures the Spanish economy is shrinking at a rate of 0.2% per annum. Additionally Spain is one of the worst offenders the Eurozone in terms of inflation, the most up to date inflation data shows price growth the be at a level of 0.14% annualized.
The fate of Spain is largely tied to that of the overall Eurozone economy. Spain for example is not particularly performing any worse than some other European countries such as Ireland. The difference is Spain’s proximity to the core of Europe, the performance of the Spanish economy has real impact on the European economy as a whole and this is no doubt constantly in the mind of the ECB.
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