By Humphrey Carter

THE number of people out of work in the Balearics fell by 16.200 during the third quarter of this year, but the 13 percent drop still means that, according to the latest survey of the active population, 104'500 people are unemployed in region.

Needless to say, the figures were welcomed by the Balearics government, although the Minister for Employment and Tourism, Joana Barcelo, was forced to admit that while the figures are “positive”, the employment situation is still “very tough”.

The rate of unemployment in the Balearics is now 17.1 percent, below the national average but still nearly double the euro zone average of 10 percent.
But, the reduction in the number of people out of work in the Balearics was the highest since 2002 and a similar trend has been experienced across the country. However, the unions are not quite as pleased with the latest figures as the Balearics government.

With the tourism season coming to a rapid close and resorts gradually closing down, the final quarter will probably show an increase in unemployment and the Secretary of the UGT, General Workers' Union in the Balearics, Manuel Pelarda, described the figures as “alarming”.

He warned that come Christmas, some 125'000 people could be out of work, up on the 100'000 who spent New Year on the dole or looking for work last year.

Pelarda also warned that many of those who managed to find jobs in the tourist industry this year may not have worked the obligatory 180 days in order to be entitled to dole over the winter.

He said that many only ended up working short contracts of 60 and 90 days and will therefore be ineligible to claim much social benefit. “We're going to finish this year with another record level of unemployed,” he said.
Across the country, the jobless rate, the highest in Europe, unexpectedly fell for the first time in more than three years and an increase in sales tax aimed at cutting the budget gap pushed up the inflation rate to the highest in two years. The unemployment rate fell to 19.8 percent in the third quarter, from 20.1 percent in the previous three months, the National Statistics Institute said yesterday.

Economists expected the rate to remain unchanged, according to the median forecast in a Bloomberg survey. Consumer prices rose 2.2 percent in October from a year earlier, accelerating from 2.1 percent increase the previous month, the Madrid-based institute said.

Spain emerged from the worst recession in six decades in the first half, led by a surge in exports.
Falling unemployment will start to ease pressure on the third-largest budget deficit in the euro region and may help the Socialist government, whose popularity has slumped in opinion polls.

The unemployment rate fell as the active population - workers and people looking for work - was unchanged in the quarter, after growing in the first two quarters of the year, the statistics institute said. “The pace of job destruction has slowed, but there's still a long way to go before we can think about a recovery in employment in Spain,” said Estefania Ponte, the Madrid-based head of research at Cortal Consors, who correctly forecast the third-quarter jobless rate.

The data signaled the labour market has reached a “turning point,” Deputy Finance Minister Jose Manuel Campa told a news conference in Madrid yesterday.

Around 75 percent of the unemployed in Spain receive some kind of government subsidy, according to Labour Ministry data.
That helped swell the budget deficit to 11.1 percent of gross domestic product last year, the third-largest in the region.
Aiming to cut that by half in two years, Spain is implementing the deepest fiscal cuts in three decades.
Those measures, including a public wage cut and pension freeze, may undermine the recovery, and the government cut its own economic forecast for next year to 1.3 percent from 1.8 percent to reflect the impact of the budget squeeze.

Bank of Spain Governor Miguel Angel Fernandez Ordonez said on October 5 that the economy showed a “clear weakening” in the third quarter.
The central bank is due to publish its third-quarter GDP estimate during the course of next week.
While the job data were “positive,” Spain still faces “a long and difficult path ahead for employment to recover,” Prime Minister Jose Luis Rodriguez Zapatero told a news conference in Brussels yesterday. “It's a very arduous task.”