Spain's Unemployment Rate Hits 24.44%, Youth Unemployment At 52%, Not Good (Q1, 2012)

Spain Unemployment Rate 24.44% (source: INE)
Wow, the Spanish government is trying to cut its budget deficit through austerity measures with the unemployment rate at an 18 year high, Spanish government bond yields and CDS rising, banks stressed with bad property loans, and regional governments possibly needing bailouts! You can see why S&P chopped Spain's credit rating to 'BBB+' from 'A' the other day and thinks there's a risk net government debt could rise further.

Spain's unemployment rate rose to 24.44% in the first quarter of 2012, which is near the multi-decade high of 24.5% in 1994 (Reuters chart via @pdacosta). And the youth unemployment (ages 16-25) rate hit 52% during the quarter (MarkitEconomics chart).

From Spain's Instituto Nacional de Estadística's (National Statistics Institute) data release on April 27, 2012:

"Employment
The number of employed persons decreased by 374,300 persons in the first quarter of 2012, standing at 17,433,200. The drop in employment affected men (278,300 fewer) more than women (96,000 fewer). By nationality, the number of employed foreign nationals decreased by 87,300, and that of Spaniards did so by 287,000.

By age, employment drop in all aged groups. By sex, the women aged between 45 to 49 years old registered the greatest increase in employment (12,400 more). In turn, the employed men aged between 25 to 29 decreased 70,200 and women aged in that group decreased 41,100...."

"Unemployment and unemployment rate
The increase in unemployment was 365,900 this quarter, standing at 5,639,500. In the last 12 months, the total figure of unemployed persons increased by 729,400 persons.

The unemployment rate rose 1.59 points, as compared with the fourth quarter of 2011, standing at 24.44%.

The increase in unemployment was almost the same for men and women..."

After seeing Spain's unemployment rate rise to an 18 year high and S&P downgrade Spain to BBB+ from A, according to Reuters, Spain's Foreign Minister Jose Manuel Garcia-Margallo said that "Spain is in a crisis of huge proportions." So hedge funds have placed their bets. According Reuters, hedge funds are betting against Spanish sovereign debt and/or finding value in distressed corporate bonds of Spanish companies with foreign earnings. Muy interesante.


Links:
Spanish Bank and Sovereign Debt Risk Monitor (Maturity Schedule, Yields, CDS /Bloomberg quotes) - DistressedVolatility
Europe's austerity drive is suicidal: Stiglitz - Reuters
Hedge funds line up bets on Spain's debt woes - Reuters
Spanish economy in "huge crisis" after credit downgrade - Reuters
Credit Default Swaps Made European Debt Crisis Worse: Study - Huffington Post (h/t) true or false?

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