Spain’s unemployment figure passed the five million mark in the last quarter of 2011, official figures show.
The National Statistics Institute said 5.3 million people were out of work at the end of December, up from 4.9 million in the third quarter.
The rate rose from 21.5% in the third quarter to 22.8% – the highest rate in nearly 17 years.
Spain already has the highest jobless rate in the 17-nation eurozone and is expected to slide back into recession.
The 22.8% rate is more than twice the average unemployment rate of the eurozone, which stood at 10.3% in November, according to data released earlier this month.
The Spanish figures show more than half of all 16-24 year-olds in the country are jobless – 51.4% compared with 45.8% before.
Spain’s new ruling Popular Party conservative government has pledged labour reforms to try to imporve the jobs market.
Rising unemployment is a double blow for the relatively new administration of Mariano Rajoy. The more people who are registered as out of work, the more the Spanish government has to pay out in unemployment benefits. And fewer people in work means fewer people paying income tax, so less revenue for the government.
On top of that, if people are not earning then they spend less and that is driving Spain into recession.
Unemployment has been high ever since 2008, when Spain’s housing boom burst and thousands of people working in the construction industry were laid off.
The Spanish government will soon announce labour reforms so that employers can hire and fire people more easily.
The last time I went to talk to people at a job centre in Madrid, people were waiting outside because there weren’t enough chairs inside.
On Thursday, public service employees staged a series of demonstrations across Spain to protest against unemployment and increasing austerity measures.
Spain has struggled since the property bubble burst in 2008.
In the years between 2004 and 2008, the average house price in Spain rose 44%, Construction represented about 16% of GDP by the end of the boom, and the unemployment rate was down to 7.95%.
However, rising house prices fuelled the sub-prime mortgage market, leading the Spanish to borrow more as they struggled to get on the housing ladder.
The downturn has seen repossessions of Spanish properties rise 32% in the past year.
The range of austerity measures proposed by new Prime Minister Mariano Rajoy’s government angered many ahead of this week’s protests.
His measures include 8.9bn euros in new budget cuts, and tax increases designed to boost government coffers by 6.3bn euros.
However, there are concerns that Mr Rajoy will be unable to meet his pre-election pledge to cut the country’s deficit to 4.4% of GDP in 2012.
The Bank of Spain predicts the country’s economy will shrink by 1.5% this year, saying the eurozone debt crisis has destroyed business confidence and closed off bank credit, causing a large drop in domestic demand.