Spain jobless rate lowest in seven years

Spain's unemployment rate hit its lowest level in seven years at the end of 2016, official data showed Thursday, as a booming tourism sector fuelled job creation.
The jobless rate fell to 18.6 percent in the final quarter of 2016, its lowest level since the last three months of 2009, according to figures released by national statistics institute INE.
While Spain's jobless rate remains the second highest in the 28-nation European Union behind Greece, the figures are further evidence that the Spanish economy is enjoying a steady recovery.
Tourism has played a big part in the improving unemployment figures. Spain hosted a record 75.3 million foreign visitors last year with the rise attributed to holidaymakers shying away from resorts in north Africa and Turkey over terrorism fears.
Spain was the third most visited country in the world last year and tourism represents some 11 percent of its economic output.
The country emerged from five years of on-and-off recession at the end of 2013, which was caused by the burst of a decade-long property bubble in 2008.
During those years, millions of Spaniards lost their jobs, with unemployment peaking at close to 27 percent in 2013.
"There is still much to do," Prime Minister Mariano Rajoy said during an interview with radio Onda Cero.
"But I insist we had five years of negative economic growth, which destroyed 10 percent of Spain's gross domestic product. You can't fix that in 15 minutes," he added.
Rajoy's conservative government credits a 2012 labour law reform that reduced severance pay, made it easier to hire and fire workers and introduced a new permanent contract with a one-year trial period for the drop in joblessness.
Economists say external factors such as the drop in oil prices, low interest rates and the weakness of the euro which helps boost exports have contributed to the shrinking of the dole queue. The number of unemployed fell by nearly 542,000 to 4.24 million in the fourth quarter from the final quarter of 2015.
But the drop was smaller than the one recorded in the final quarter of 2015 when the number of jobless fell by over 687,000 people from the same period a year earlier, a sign that the pace of job creation is starting to slow.
"We believe the figures are bad because you can see a deceleration in the creation of employment," Ramon Gorriz of Spain's largest union, Comisiones Obreras (CCOO), told a news conference.
Unions also complain that the quality of the jobs being created is poor. Just over one in four jobs, 26.5 percent, which were created in the fourth quarter were short term.
Spain is the country within the European Union with the highest proportion of short-term contracts, according to Eurostat, the bloc's statistical office.
Rajoy, in power since 2011, has pledged to create 500,000 jobs a year, and forecasts the jobless rate will drop steadily to 13 percent in 2019.
He is banking on continued economic growth. The International Monetary Fund estimated last month that Spain's economy expanded by 3.2 percent last year and will continue to grow in 2017, albeit at the more moderate rate of 2.3 percent.