2nd UPDATE: Spain Oct Jobless Claims +2.7% On Mo, +35% On Yr

(Adds government comment, EU forecast.)

 
   By Jonathan House and Daniel de la Puente 
   Of DOW JONES NEWSWIRES 
 

MADRID (Dow Jones)--Spanish jobless claims continued to escalate in October as one of Europe's worst recessions grinds on.

Spanish jobless claims rose by 98,906, or 2.7%, to 3.8 million in October from September, the labor ministry said Tuesday. In annual terms, jobless claims were up 35%.

Octavio Granados, head of Spain's social security administration, said the government expects Spain's job market to stabilize over the first eight months of 2010.

"In the final four months [of next year] we expect to start creating jobs, in seasonally adjusted terms," Granados said at a briefing with journalists.

The global financial crisis brought about the collapse of Spain's once-buoyant housing market last year and pitched the wider economy into recession. Many economists expect Spain to be one of the last European countries to return to growth.

According to recent data from European Union statistics agency Eurostat, Spain had a 19.3% unemployment rate in September, more than twice the 9.2% rate for the EU as a whole.

In its autumn economic forecasts, published Tuesday,the European Commission predicted Spanish unemployment topping 20% next year.

Earlier this year the Spanish government rushed out an EUR8 billion infrastructure plan it says has created over 400,000 new jobs since April. But that plan is now winding down and the government says it is focusing on policies that encourage a rebalancing of the economy away from its reliance on the construction industry.

"But that can't be done overnight," Finance Minister Elena Salgado said in an interview with Telecinco television station.

In the meantime, the government is expanding protection for the unemployed, Salgado said. The government recently created a new benefit program for the long-term unemployed, for which it has already received over 100,000 applications.

Labor ministry Web site: www.mtas.es

-By Jonathan House, Dow Jones Newswires; +34-91-3958121; jonathan.house@dowjones.com

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November 03, 2009 10:08 ET (15:08 GMT)


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