Spain retail sales decimated by VAT hike

Spanish retail sales fell at their fastest pace on record in September as already battered consumer confidence took another hit from a hike in value added tax, driving many shoppers to trade down to cheaper products. Sales fell 10.9 percent year on year, Monday's National Statistics Institute data showed, reflecting an economy struggling through its second recession in three years and plagued by chronically high unemployment.

The drop was the biggest in calendar-adjusted terms since current records began in January 2004, and marked the 27th monthly decline in a row. Spain has been in recession since the first quarter of the year and is not likely to grow again until late in 2013, according to official estimates that many economists consider optimistic.

The country had the highest unemployment rate in the European Union in August - 25.1 percent - according to EU data. That figure is expected to rise further as a large public deficit forces the government to implement deeper spending cuts and further tax hikes to persuade markets it can control its finances. It increased sales tax on September 1. Read more >>

Spain Unemployment At Record Levels

Aljazeera.com
New figures show that Spanish unemployment has hit record levels, with nearly one quarter of the labor force unable to find work. The news was announced hours after the country's credit rating was cut two notches to "BBB " by ratings agency Standard & Poor's.

According to the new data released on Friday, unemployment levels hit 24.4 per cent at the end of March, the highest level since a statistical series began in 1996. The rate for people under 25 years of age was 52 per cent, up from 48.5 per cent in the previous quarter.

The number of unemployed people in the country has now risen to 5,639,500 people, according to the national statistics institute. This represents a rise of 365,900 from the last quarter. Total unemployment has risen 1.5 per cent, from a level of 22.9 per cent of the labour force in the final quarter of 2011. 

The institute also said that the number of households with every adult member unemployed rose by 153,400 to 1.7 million. Spain has the highest unemployment rate in the 17-member eurozone. "The figures are terrible for everyone and terrible for the government,' Jose Manuel Garcia-Margallo, the country's foreign minister, told Spanish National Radio. "Spain is in a crisis of enormous magnitude." More...