Palma.—Spain's number of registered jobless, fell in May but seasonal hires were largely responsible, checking government optimism that the drop heralded a turnaround, for the country's crippled economy.

Here in the Balearics, the region led the improvement with unemployment falling by 7'917, a drop of 9.42 percent in comparison to April.
The fall in the number of people ‘officially registered' out of work, in the Balearics has now contracted to 76'124, significantly lower, than the 82'524 people who were unemployed at the end of May last year.

Union warnings
The Balearic government welcomed the figures but President Jose Ramon Bauza was keen to stress, the need for caution and no complacency, because the Balearics still has a large unemployment problem which needs to be tackled with long term solution, and this is what Union leaders are worried about.

Sources for both the UGT General Workers' Union and the CCOO, General Workers' Commission, also welcomed the news, but warned that many of the new jobs which have been created are seasonal and that come the end of the tourist season, thousands of people will be back on the dole heap, providing they are entitled to benefits.

The Prime Minister, Mariano Rajoy, knew the latest figures before the weekend, and told the media that Tuesday will bring some good news.
And, with chronically high unemployment a source of rising social unrest and the greatest barrier to a return to growth, Rajoy showcased yesterday's labour ministry data saying it would be “clearly encouraging.” It showed the registered jobless total fell by 1.97 percent or more than 98'000 people, leaving 4.89 million out of work.
The data marked a ‘record drop' for May and was “the best we've seen since the crisis began,”Industry Minister ,Jose Manuel Soria, told a conference yesterday. But it excludes the long-term unemployed, and once seasonal factors such as holiday hires by hotels and farmers were added in, the drop was just 265 people. “To say this data supports the onset of a recovery in the labour market is a bridge too far in my view,” said Martin Van Vliet, economist at ING. “It is not necessarily a recovery, driven by healthy job growth. It could also be influenced by the recent trend of young people moving abroad in search of work.” At 27 percent in the first quarter, Spain's unemployment rate is the highest in the European Union, after Greece, and even if the country pulls out of recession next year as economists forecast, job creation could lag for some time longer.

The rate has risen steadily along with the budget cuts and labour market reforms that Rajoy's government has introduced, fuelling public anger and sparking protests in major cities.

Long dole queues
The link between austerity and lengthening dole queues has also created ‘a dilemma' for Europe's policymakers, and Germany's Finance Minister warned last week that “failure to cut youth unemployment in particular, could tear the continent apart”.

Spain's youth unemployment rate has soared well beyond 50 percent, and many young Spaniards have responded by emigrating in search of jobs.
Meanwhile, workers from countries like Ecuador and Colombia who had staffed a Spanish construction industry boom, before a 2008 property crash have returned home or moved elsewhere.

Spain's official population fell last year for the first time, since records began. If the trend continues it could improve the unemployment figures by removing jobless people from the statistics.

May and June traditionally show a drop in the number of registered jobless, as Spain's holiday season begins, boosting employment in hotels and restaurants and for the harvest of soft fruit like cherries, apricots and peaches.

The Labour Ministry data also omits the more than one in ten of Spain's workforce that has been out of work for a year or more. Unemployment benefit stops after two years.

The National Statistics Institute, which polls registered, and non-registered unemployed , showed that 27 percent, or 6.2 million people, were out of work in the first quarter.

That rate has risen every quarter since mid-2011.
Credit rating agency Fitch Ratings said it expected the unemployment rate to peak, at 28.5 percent in the first quarter of next year, as government measures like wage-setting reforms took effect and a contraction in industrial output reached its limit.

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