Spanish official unemployment rises in January

MADRID:  The number of people unemployed in Spain, which has the highest jobless rate in the industrialised world, rose in January putting an end to five straight months of declines, the labour ministry said Wednesday.There were 4.23 million people registered as jobless last month, up 130,930 or 3.19 percent from December with over 80 percent of the job losses coming from the service sector, it said in a statement.

Compared with the total 12 months ago the figure was up 4.51 percent, or 182,510."This is a bad figure, because every time unemployment goes up this is negative," said Spain's secretary of state for employment, Mari Luz Rodriguez.The government does not provide a jobless rate, but the national statistics institute, which uses a different calculation method from the labour ministry, said last week that the rate had surged to 20.33 percent at the end of 2010.

That rate is the highest in the industrialised world and easily exceeds Prime Minister Jose Luis Rodriguez Zapatero's target of 19.4 percent for the year The Spanish economy, the European Union's fifth biggest, slumped into recession during the second half of 2008 as the global financial meltdown compounded the collapse of a labour-intensive construction boom

It emerged with tepid growth of just 0.1 percent in the first quarter of 2010 and 0.2 percent in the second but then stalled with zero growth in the third. Zapatero has said the fourth quarter will show positive growth which would pick up steam in 2011 but he warned that job creation would be "far from what we need and desire. It will be slow and progressive."

In October the government raised its forecast for the jobless rate for 2011 to 19.3 percent from a previous estimate of 18.9 percent due to the effects of government spending cuts aimed at reining in a massive public deficit and reassuring nervous markets that Spain will not need an Irish-style bailout.

It predicts the jobless rate will dip to 17.5 percent in 2012 and 16.2 percent in 2013.

Last year the government introduced a hotly contested labour market reforms which cut the country's high cost of firing workers and gave companies more flexibility to reduce working hours and staff levels in economic downturns -- changes that it argued would boost job creation.