Spanish unemployment ticks up in August as tourism boom wanes

September 2, 2016 7:12 AM EDT

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MADRID (Reuters) - Spanish unemployment rose for the first time in five months in August, coinciding with the tail-end of a bumper tourism season, though the underlying pattern suggested a long but gradual recovery in the labor market remains on track.

A record summer for tourist arrivals has helped the economy shrug off a prolonged period of political uncertainty and, seasonally-adjusted, the number of people registered as jobless fell by 24,462 people in August, Labour Ministry data showed on Friday.

But compared with July the jobless number rose by 0.39 percent, or 14,435 people, leaving 3.7 million out of work.

Increases in unemployment are common in Spain in August, as factories reduce activity in what is the peak holiday season and many private sector teachers fall off the social security registers that track job creation in the lull that precedes the start of the new school term.

Hotels and restaurants, meanwhile, continued to create jobs last month though the services sector as a whole laid off staff, the ministry said.

With the bumper summer for tourism drawing to a close, Spain faces a fresh challenge to keep its economic recovery on track as one of the major drivers of growth and employment wanes.

Two inconclusive elections in the past eight months have left the country unable to form a new government amid a stand-off between parties on the right and left, and the impasse may start to weigh more heavily on the turnaround if it drags on, acting Economy Minister Luis de Guindos said this week.

Later on Friday conservative acting Prime Minister Mariano Rajoy faces a second confidence vote in parliament for a second term in office. If he loses as expected, the countdown would be triggered to a likely third election in December.

A gradual recovery in Spain's jobs market, which collapsed in 2008 when a real estate bubble burst and the economy sank into a long recession, has so far underpinned a consumer spending rebound.

That in turn has helped economic growth stay robust in the first two quarters of the year, meaning Spain can ill afford any slowdown in job creation.

Compared to August last year, there were just over 519,000 more people in work, up 3 percent, the ministry said.

But on a month-on-month basis, nearly 145,000 fewer people were registered as working, the biggest drop between July and August since 2008.

(Reporting by Sarah White; editing by John Stonestreet)

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