Spain's jobless numbers up in October, no relief in sight

By Sarah Morris

MADRID (Reuters) - Spain's registered jobless rose in October as tourist season hires were laid off, suggesting an expanding economy has yet to make inroads into an unemployment rate EU authorities expect to stay above 25 percent through 2015.

The number of registered jobless rose by 87,028 people, leaving 4.81 million out of work, adjusted data from the Labour Ministry showed on Tuesday. The increase was especially pronounced in the services and agriculture sectors.

Year on year, jobless numbers fell for the first time since May 2007, data the government said showed the economic recovery was gaining a foothold. Gross domestic product rose for the first time in ten quarters in the three months to September, albeit by just 0.1 percent.

Spain's economy has contracted around 7.5 percent since 2008, when the bursting of a decade-long property bubble left millions out of work and sent domestic demand into freefall.

The rebound, led by the export sector, is expected to be shallow, due in part to the stubbornly high unemployment as well as one of the euro zone's highest deficits.

The Ministry's monthly jobless data uses a different methodology to the National Statistics Institute's quarterly survey. The latter, considered a better guide to the total number of people out of work, showed unemployment at 26.0 percent in the third quarter.

In macroeconomic forecasts for euro zone countries published in Brussels on Tuesday, the European Commission said it expected Spain's unemployment rate to inch up to an average of 26.4 percent in 2014, dropping only marginally to 25.3 percent in 2015.

"Unemployment is projected to fall gradually... as the labor force continues to shrink and employment destruction reaches a turning point in the course of 2014," the Commission said in a statement.

Meanwhile, the economic revival would gather pace, with GDP growing by 0.5 percent next year and 1.5 percent the year after, the commission said. Authorities in Madrid forecast growth rates of 0.7 percent and 1.2 percent, respectively.

The Commission said Spain's fiscal deficit could widen to 6.6 percent of GDP in 2015, worse than the target of 4.2 percent, meaning the country could be forced to make further tax hikes or budget savings.

(Editing by Julien Toyer and John Stonestreet)