The number of Spaniards registered jobless fell for a sixth month in a row in July. But as Sonia Legg reports, with nearly all new hires on temporary seasonal contracts, the revival of a long-depressed labour market remains a work in progress.
It's the sixth fall in a row in monthly jobless figures. But an end to Spain's unemployment problem it isn't. Of the 1.8 million contracts created in July, more than 93 percent were temporary - many seasonal. And the 1.8 percent drop still leaves more than 4 million out of work. Leaving prime minister, Mariano Rajoy, with a dilemma, says CMC Markets Michael Hewson. SOUNDBITE: Michael Hewson, Market Analyst, CMC Markets, saying (English): "It's still well north of 20 percent and youth unemployment is very, very high and I think between now and the election at the end of this year he has got to impress on Spanish voters that any potential alternative is worse and that some form of trickle down effect does actually start to permeate into consumers pockets." Spain's economy is on course to be the fastest-growing in the euro zone this year. But the road to that recovery has been long and hard. The new 2016 budget continues to focus on cuts but it also includes Rajoy's first spending hikes. Treasury Minister Cristobal Montoro. (SOUNDBITE) (Spanish) SPANISH TREASURY MINISTER, CRISTOBAL MONTORO, SAYING: "What is leading the way out of the crisis is austerity politics, the politics of not increasing expenditure. If we compare ourselves with other European countries we see how they don't really have a way out, they don't have a solution." There's a lot at stake. The centre-right government is wary of the rise in popularity of the anti-austerity Podemos party. It knows it must convince voters they will see the benefits of the new growth, particularly if the fall in unemployment ends with the summer.