Palma.—Unemployment in the Balearics did continue its downward trend last month, but the decline was minimal considering August is peak season and it has got the unions worrying about the coming winter.

The Majorcan Hotel Federation has already claimed that the fact that average hotel occupancy was only 90 percent last month, when the island should be fully of even over booked, shows that the “economy is broken” and now the unions fear that a 564 drop in the number people out of work during what is traditionally the busiest month of year, is not encouraging.

In comparison to July, unemployment in the Balearics shrunk by just 0.75 percent - “nothing” as one union leader described it yesterday.
And, despite the decline, the number of unemployed last month was still five percent, 3.595 people, higher than August last year.
Nevertheless, last month's negligible drop was the eighth consecutive month that unemployment has fallen in the Balearics but, as far as the unions are concerned, the rate of unemployment is not declining fast enough and this winter is going to be very tough for thousands of people in the Balearics because, once the tourist season comes to an abrupt end next month, thousands of people face losing their jobs and many of those may not be entitled to any social benefits. What has also concerned the unions is that nearly 1'000 people, signed off from the social security last month. Nearly double the number of people who lost their jobs.

Union bosses are concerned that an ever increasing number of people are working on the black market and disagree that the real total number of people out of work in the Balearics stands at 74'960.

Of the active population, experts claim that the real figure stands at around 100'000 and that would mirror what has been happening on mainland Spainwhere Spanish registered unemployment rose in August for the first time in five months amid a worsening recession.

The number of people registered unemployed and claiming benefits in Spain rose in August by 38'179 compared to the previous month, the first increase in five months, Spain's Employment Ministry said.

Ministry spokeswoman Engracia Hidalgo said in a statement that a total of 4'625'634 people were eligible to claim unemployment benefit, an increase of 0.8 percent.

Although Spain, the fourth largest economy among the 17 countries that use the euro, is in a double-dip recession, the year-on-year August number dropped from 51'185 in 2011, the statement said.

Hidalgo said although the monthly rise in unemployment was bad news, the increase was the smallest since August 2006.
Another slightly positive note was that unemployment among young people under 25 years old, one of the brackets hardest hit by the recession, fell by 4'060, a 0.9 percent dip relative to the previous month.

Markets fearful that Spain may not be able to reduce its swollen deficit have been charging high prices for the country's debt.
Spain's benchmark 10-year bond rate stood at 6.7 percent and the IBEX-35 stock index was flat in morning trading Tuesday.
German Chancellor Angela Merkel is due to visit Madrid tomorrow for talks with Prime Minister Mariano Rajoy, where Spain's progress with austerity measures is likely to be high on the agenda. “The Government remains committed to pursue all necessary reforms to promote employment,” said Hidalgo.

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