The government reported Friday that unemployment rose to 24.4 percent in the first quarter -- compared with 22.9 percent in the fourth quarter -- and that more than half of Spaniards under 25 are now without jobs. The bleak employment report came one day after ratings agency Standard & Poor's downgraded the country's debt.
The Spanish economy is in recession for the second time in three years as the damage from a housing bust persists. Foreclosures are rising, Spain's banks are in worse financial shape and the government's deficit is hitting worrisome levels.
The figures were another blow to the conservative government of Mariano Rajoy after Standard & Poor's late Thursday became the first of the three leading credit rating agencies to strip Spain of an A rating. It cited a worsening budget deficit, worries over the banking system and poor economic prospects for its decision to reduce the rating by two notches from A to BBB+.
S&P even warned that a further downgrade is possible as it left its outlook assessment on Spain at "negative."
For more: Spain crisis deepens with jobless rise, downgrade - BusinessWeek
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