Unemployment In Spain Up Sharply In Q2 2008

Unemployment in Spain, the source of half the euro region's new jobs between 2001 and 2006, was up sharply in the second quarter as the credit crunch in the financial sector gradually extended its reach across the whole economy..

Spain's unemployment rate was up at 10.4 percent (from 9.6 percent in Q1) according to data from the National Statistics Office (INE) this morning. The number of people in employment increased 0.1 percent from the previous quarter and stood at 20.4 million, as compared with a 0.4 percent decline in the first quarter, but we need to consider seasonal factors here, since employment should normally be rising sharply in the second quarter.

The number of jobs in construction fell 4.5 percent to 2.55 million, while manufacturing jobs declined 2.1 percent and agricultural jobs were down 5 percent. Service jobs increased 1.9 percent to 13.81 million.

This data is compiled by the INE on a quarterly basis using a different methodology (survey based) than that used by INEM, which gives the monthly data. At this point it is hard to estimate the actual July increase which we should get to see next week, but it is likely to have been considerable. Meantime here is the last monthly chart based on the INEM data.