Spain unemployment hits record high at 25 percent

One in four Spanish workers were without a job in the third quarter of this year, a record high, and further layoffs are likely to follow next year as more of the country's 60 billion euro program of budget austerity kicks in.

The official numbers follow labor unions call for a general strike for November 14, part of growing protests over cutbacks that many believe have done little to combat the crisis and only served to put more people out of work.

Data from the National Statistics Institute showed the unemployment rate rose to 25.0 percent in the three months from July-September, a level unseen since the Francisco Franco dictatorship ended in the mid-1970s.

That was up from 24.6 percent in the previous quarter, and just below the 25.1 percent consensus forecast. The number of workers without a job stood at 5.8 million.

Only Greece has higher unemployment in the European Union and the data puts further pressure on the government as it battles to control a public deficit to meet Brussels' demands in a recession that shows no sign of letting up.

Spain's financing needs are largely covered for this year, and its cost of borrowing from bond markets has eased significantly since August thanks to the European Central Bank's promise to buy the country's bonds should it call for help.

Yet austerity measures, worth over 60 billion euros by 2014, are likely to crimp growth further, and cast more workers out of a job.

"There is a debate over the optimistic growth outlook for next year by the government, which is given little credibility. Weaker growth than expected, coupled with austerity, could easily see unemployment hit 26 percent next year," said Silvio Peruzzo, economist at Nomura in London.

Government forecasts show the economy contracting next year by 0.5 percent, while a Reuters poll this week showed it shrinking three times that much.

The government expects the economy to shrink 1.5 percent this year, while the official outlook is for the unemployment rate not to fall below 24 percent until 2014.

The economy slipped back into recession at the end of last year. The government says 2013 will be the final year of recession for Spain, a view shared by the euro zone's largest bank Santander.

(Reporting by Nigel Davies; editing by Fiona Ortiz and Patrick Graham)