If you thought US jobless figures were gloomy, you might want to take a look at the statistics out of Spain.
In the US (emphasis ours):
Nonfarm payroll employment continued to decline sharply in March (-663,000), and the unemployment rate rose from 8.1 to 8.5 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today.
Since the recession began in December 2007, 5.1 million jobs have been lost, with almost two-thirds (3.3 million) of the decrease occurring in the last 5 months. In March, job losses were large and widespread across the major industry sectors.
Among the unemployed, the number of job losers and persons who completed tem- porary jobs increased by 547,000 to 8.2 million in March. This group has nearly doubled in size over the past 12 months.As Edward Hugh at a Fistful of Euros compares, in Spain (our emphasis):
The number of unemployed in Spain was up again in March - by “only” 123,543. I say “only” since it is evidently less than the 154,508 increase registered in February, or the 198,538 registered in January. And indeed many of the newspaper stories have been full of arguments from Employment Minister Maravillas Rojo (would that she could work “Maravillas”) about how Spain registered the weakest unemployment gain in six months in March (when compared to the previous month). However, as those who look into the economic analysis side of this a bit more (and who don’t believe in either wonders or “miracles) point out, taking seasonal factors into account the monthly 3.55% rise in March shows a more or less steady trend, and no special sign of improvement, despite the large stimulus programme. Last March, for example, unemployment fell by 0.62%.
So when we come to look at the year on year situation (which more or less eliminates the seasonal variation) we find that the year on year rate of increase of 56.69% was the highest so far, and if we look at the chart we will see there is no sign of a softening in the curve.
And here’s the chart:
In terms of the unemployment rate, the latest quarterly estimate from the national statistics agency is 13.9 per cent for the fourth quarter of 2008. According to European Union statistics agency Eurostat, however, Spain’s unemployment rate rose to 15.5 per cent in February which, as Hugh points out, is the highest level in the whole 27-nation bloc.
The government itself expects unemployment to rise to 15.9 percent by the end of the year, according to an AP report. Hugh believes this to be a hopelessly unrealistic figure.
His own forecast is much more dire. As he explains:
My own forecasts would be on the moderate forecast around 20% by the end of 2009 and 25% by end 2010, and on the worst case scenario possibly 22% by the end of this year, and 27% to 30% by the end of 2010. These latter numbers look horrific, and seem hard to believe, but we are currently set on a path (especially now with the “breakages” in the banking system - today there is growing and informed speculation here in Catalonia that Caixa Penedes, and Caixa Catalunya may be the next to go) where it is hard to see how we won’t get to that horrible place if no one does anything.
And since at this moment the entire European leadership seems to be in denial that there is any special problem in Spain nothing looks likely to be done. (Jean Claude Trichet simply said what he had to to the Spanish journalist who questioned him on the Spanish banking system in yesterdays press conference - “I have every confidence in the strength of the Spanish banking system). Even that G20 meeting that is hitting the headlines seems to have had little to offer for countries like Spain, there were plenty of ideas about how to avoid falling into another bubble situation in - say - 2020, but virtually none about how to drag us out of the one we are currently stuck in.
As a comparison, the Bank of Spain today forecast Spanish unemployment to rise to 17.1 per cent this year, and 19.4 per cent next year.
