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UPDATE 1-Spanish unemployment rises in October as second wave of COVID-19 bites

(Recasts, adds job creation, background)

MADRID, Nov 4 (Reuters) - Spain reported a 1.31% rise in unemployed people in October from the previous month as fresh restrictions to contain a second wave of coronavirus infections hobbled the job market, official data showed on Wednesday.

Registered job seekers increased by 49,558 from September, leaving 3.83 million people out of work, Labour Ministry data showed.

Some 600,000 people are being supported by a government furlough scheme, preventing a steeper rise in jobless figures.

“This indicates the important challenges we have as a country to improve access to employment,” Labour Minister Yolanda Diaz tweeted.

Hit harder than most by the pandemic, Spain imposed a tough lockdown from March to June, triggering Europe’s worst economic crash. Third-quarter GDP data released last week showed the economy was still 8.7% smaller than a year ago.

Despite the uptick in unemployment, Spain added 113,974 jobs in October, marking the sixth straight month of job creation, data from the Social Security ministry showed.

Increased hiring in the public sector drove the job creation, while some 85,000 jobs in the hospitality sector were wiped out.

In total, more than half the jobs destroyed during the pandemic’s April peak have now been recovered but many still struggle to find work.

“I was working as a cook and a week after we were confined (they threw me out),” said 28-year old Roberto Mendez, waiting outside a Madrid unemployment office. “To this day I am trying to collect unemployment benefits.” (Reporting by Anita Kobylinska, Nathan Allen and Belen Carreno; Additional reporting by Elena Rodriguez and Guillermo Martinez; Writing by Nathan Allen Editing by Ingrid Melander)

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