Apr 29, 2019

Spain's unemployment report is Europe's latest problem

Dion Rabouin

Spain's Socialist leader Pedro Sanchez. Photo: A. Ware/NurPhoto via Getty Images

Spain held its third election since 2015 over the weekend with the country's Socialist party declared the winners. Left-leaning allies also secured victories, but Socialist leader Pedro Sanchez still looks to be a few seats short of the needed majority to form a ruling coalition.

The intrigue: The election came on the heels of recent data showing Spain's unemployment rate, long bottom of the barrel in developed Europe, had posted its biggest quarter-on-quarter increase in 6 years. Economists had actually projected Spain's unemployment rate would fall, but it rose to 14.7%.

The country's economy has grown every year since 2013 and the unemployment rate fell to a 10-year low in October.
Spain created just under 600,000 jobs over the past 12 months, the biggest one-year gain since the summer of 2007, before the start of the country's economic crisis, which essentially lasted for 6 years.

The bottom line: The pickup in Spain's unemployment rate and growing divisions in its parliament could signal more problems for the euro zone, which is already full of them.

Go deeper: Socialists win Spain election as far-right party enters parliament for 1st time

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Spain's unemployment report is Europe's latest problem

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