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Spain's jobless figure drops 5th month in a row

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August 2, 2013 12:12 PM EST | AP

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MADRID — The number of people registered as unemployed in Spain dropped for a fifth consecutive month in July as the busy summer tourist season continued to create jobs, government figures showed Friday.

But the International Monetary Fund warned that recovery will be slow, particularly in the labor market, though it praised the government's commitment to economic reforms.

A statement from the labor ministry said the total number of people registered as jobless fell by 64,866 last month to a rounded total of 4.69 million – giving it an unemployment rate of 26.3 percent.

It said the last time Spain registered five consecutive monthly reductions was in 2007, just prior to the start of the economic crisis.

The statement said that since January, the number of people registered as unemployed had dropped by 149,909.

In seasonally adjusted terms, however, the ministry said the total figure rose by 7,591 from June for a total of 4.88 million.

The ministry added that the overall drop in July's unemployment figures was more than double the reduction posted in same month 2012.

The government claims two years of austerity measures and reforms are starting to work and predicts Spain's recession will end this year.

An IMF report Friday lent support to the government's prediction, saying there is evidence that key economic indicators are returning to more normal levels.

It noted yields on Spain's 10-year bonds – what the country would have to pay to raise 10-year money from the markets – have continued to drop in recent months, while the budget deficit fell last year, to 7 percent of gross domestic product from 9 percent in 2011.

Full recovery will take some time, however.

"The adjustment process is proving slow and difficult," the IMF said, noting that the economy has contracted over the last seven quarters and had shrunk 1.6 percent in 2012.

The fund praised the Spanish government's efforts to enact changes, saying "decisive reforms in the labor, financial and fiscal sectors ... (are) helping stabilize the economy."

It predicted the unemployment rate, one of the eurozone's highest, will stay stubbornly high. After climbing to 27.2 percent this year, from 25 percent in 2012, the jobless rate is forecast to fall slightly to 27 percent in 2014 and 26.9 the following year.