MADRID (AP) — The hole in Spain's economy is getting deeper.
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 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 first-quarter employment data showed that 365,900 people lost their jobs, bringing the number of unemployed Spaniards to 5.6 million. The unemployment rate for people under 25 climbed to 52 percent, up from 48.5 percent in the previous quarter.
"The figures are terrible for everyone and terrible for the government," Foreign Minister Jose Manuel Garcia-Margallo told Spanish National Radio. "Spain is in a crisis of enormous magnitude."
The total number of unemployed increased by 729,400 compared with the first quarter of 2011. The National Statistics Institute said Friday that Spain now has 1.7 million households in which no one has work.
The figures were another blow to the conservative government of Prime Minister 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."
Spain, the eurozone's fourth-largest economy, is just now just three notches above so-called junk status. Earlier this week, the Bank of Spain confirmed that the country had entered a technical recession — two consecutive quarters of negative growth.
The country's economic problems have become the epicenter of Europe's debt crisis in recent weeks as investors worry over Spain's ability to push through austerity measures and reforms at a time of recession and mass unemployment.
The cuts are aimed principally at slashing the government's deficit from 8.5 percent of economic output to the maximum level set by the European Union of 3 percent by 2013. For this year the goal is 5.3 percent.
With the economy shrinking and the population restless, there are concerns that the government will not meet its targets and will be forced to seek a financial rescue as Greece, Ireland and Portugal have done before.
The difference is that Spain's economy is double the size of the combined economies of the three countries that have already been bailed out. The other eurozone countries would struggle to muster enough money to rescue it.
The government later Friday released a flurry of upbeat data on how it plans to turn the economy around between 2012 and 2015. Despite the dismal job numbers, it predicted a roughly balanced budget in 2016.