Spain unemployment hits record high at 25%
Unemployment in Spain climbed to a new record high at 25%, a level unseen since the Franco dictatorship ended in the mid-1970s. The figure is a hair below estimates at 25.1% but higher than the previous 24.63%, confirming that the labour market in the Mediterranean country is even farther from the slightest sign of improvement. The number of workers without a job stood at 5.8 million. Only Greece has higher unemployment in the European Union. The figure puts further pressure on the government as it battles to control a public deficit to meet Brussels’ demands in a recession that shows no sign of letting up. Further layoffs are likely to follow next year as more of the country’s 60 billion euro programme of budget austerity kicks in.
Quickly returning to the top spot of the Eurozone’s crisis watch, Greece’s health seemed to take a turn for the worst. The WSJ reported that officials said the country requires an additional €30 billion to fill its funding gap through 2016. Negotiations to release the next tranche of aid in the already agreed-upon program have proven difficult enough.
In the US, fewer people filed first-time applications for unemployment benefits last week as claims reduced by 23,000 to 369,000. The recent run of employment data suggests employers are seeing sufficient demand to maintain existing staff levels despite growing concerns about the slowing global economy. Further positive news came from the latest US Durable Goods data, which beat expectations, re-enforcing the belief of many investors that the world’s leading economy has turned the corner thanks to the extraordinary measures taken by the Federal Reserve in recent months.
We will learn more about the state of the America’s economy later today when two key pieces of American data are released. The Q3 GDP growth data for the giant US economy will be closely-monitored, with an annualised increase to a healthy 1.9% anticipated. Then later today, the latest Michigan Sentiment survey is published. Last month’s showing of 83.1 thrashed expectations.
On the FX markets, the notable upside surprise on the headline UK GDP release helped Sterling make gains against both the US dollar and the euro. GBP/USD has sustained a move above $1.61 while GBP/EUR is trading above €1.2450 early this morning. However, the gains made by Sterling are of a lesser magnitude than might have been anticipated given the strong figure
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