Spain unemployment falls to lowest level in two years

Palma—   Spain’s unemployment rate fell to its lowest level in two years in the second quarter, data showed  yesterday, lifted by strong job creation in the services sector and adding to hopes of a sustained economic turnaround.
Unemployment fell to 24.5 percent from 25.9 percent a quarter earlier, the National Statistics Institute said.
The headline figure remains the second highest in Europe, but the drop was steeper than expected as more than 400,000 people started work, the largest quarterly increase since the second quarter of 2005.
“These figures are much better than expected and while there’s an important seasonal element, seasonally adjusted figures are also strong,” said Jose Luis Martinez, economist at Citi in Madrid.
“I have the feeling that there has been a very sharp halt in activity in the last two years, maybe more than is rational, and that’s starting to normalise.”
Spain has been in and out of recession since a housing bubble burst in 2008, leaving millions of low-skilled labourers out of a job and sending the unemployment rate from a low of around 8 percent in 2007 to a high of near 27 percent last year.
After years of painful fiscal adjustments and structural reforms, the country’s economy is now expected to grow by over 1.2 percent this year and as much as 2 percent in 2015, making it one of the strongest performers in the euro zone.