Spanish unemployment drops to lowest level in over four years

The number of people out of work in Spain fell by a record amount in 2015, data showed on Thursday, but with unemployment at over 20 percent, the scars of a deep downturn that led to one of the biggest electoral upsets in decades are still evident.
The jobless rate fell more than forecast to 20.9 percent of the workforce in the fourth quarter, its lowest level since mid-2011, from 21.2 percent three months earlier, the National Statistics Institute said. A strong economic recovery pushed the number of unemployed down by 678,200 people for the whole year, the biggest ever annual fall, to just under 4.8 million.
But the rebound masks some of the problems that fed into a protest vote against established political parties in a December election, such as Spain's over-reliance on more precarious temporary jobs than many European countries. There were almost twice as many short-term jobs created in 2015 than permanent ones, the INE data showed. "Clearly, the trend is encouraging...and the overall figures are positive," said Vincenzo Scarpetta, a political analyst at Open Europe in London.
But the abundance of temporary contracts was a concern. "If the economic cycle starts going less well, those jobs could start to evaporate," he said. Economists have said that a prolonged political impasse could delay reforms, including ones aimed at helping the labour market recover further, after the inconclusive election. Voters turned in droves to upstart parties campaigning for a new economic approach or, like anti-austerity Podemos, for a reversal of spending cuts and greater social equality.
The ensuing deadlock, with the centre-right People's Party (PP) in first place but far from a majority and the left-wing Socialists in second, has yet to result in a government. Spain has overcome a double-dip recession that sent unemployment soaring to just under 27 percent at the end of 2013, and so far dropping joblessness has fed into the recovery, fuelling consumer spending.
Retail sales grew 3.6 percent in 2015 as a whole, INE also said on Thursday, the biggest annual rise in 15 years. Economists expect jobs to keep growing for now, though at a weaker pace. "We see signs of a slowdown in job creation, in line with (economic) activity," said Daniel Fuentes, a senior economist at Madrid-based consultancy AFI.