Spain sees slight increase in first quarter jobless

Spain's high unemployment rose slightly in the first quarter, official data showed Thursday, in a bleak reminder of the challenges the country faces as it seeks to cement a fragile economic recovery.

The jobless rate rose to 23.78 percent, according to the National Statistics Institute (INE), up from 23.7 percent in the previous quarter.

The number of people out of work in the January to March period actually fell by 13,100 to 5.44 million when compared with the previous quarter, the biggest drop in unemployment in a first quarter since 2005, it said in a statement.

But the unemployment rate still rose because the size of the workforce shrank during the first quarter by 127,400 people to 22.9 million as the length of Spain's economic downturn prompted many long-term unemployed to give up looking for work or leave the country.

Winter is traditionally a bad period for jobs in tourism-dependent Spain.

The Spanish economy, the eurozone's fourth-largest, fell into recession in 2008 when a property bubble burst putting thousands of labourers out of work, and the resulting aftershock claimed millions more jobs across the country.

The economy grew by 1.4 percent in 2014 -- the first full-year economic growth since the property collapse -- due to a rise in private consumption, higher business investment and a recovery in the construction sector.

But unemployment is expected to remain high with the International Labour Organization predicting Spain's jobless rate remaining above 20 percent until the end of the decade.

Spain's unemployment rate stood at 8.57 percent in 2007 at the height of the property boom, its lowest annual level since the country returned to democracy following the death of dictator Francisco Franco in 1975.

Conservative Prime Minister Mariano Rajoy, who is facing a year-end general election, has repeatedly said creating jobs is his top priority after pushing through labour market reforms, reducing a budget gap and rescuing the country's teetering banks.