Spain's labor market continued to hemorrhage jobs at the start of the year as the economy headed toward a double-dip recession in part fueled by an austerity drive.

The Labor Ministry said Thursday the number of jobless claims in January climbed 177,470, or by 3.2 percent, from December to 4.559 million as the economy shed an average of about 9,000 jobs per working day in the month. At the same time, the number of people signed up with the Social Security declined by 283,700 to below 17 million for the first time since the current statistical series began in 2005.

Reuters quoted Cortal Consors' economist Estefanía Ponte as saying the figure indicated a jobless rate of around 23.6-23.7 percent. According to the National Statistics Institute's Active Population Survey released last week, unemployment at the end of last year stood at 22.85 percent, more than double the average in the European Union.

"Apart from the deep economic crisis this country is experiencing, the labor reforms introduced by the previous government have failed to avoid layoffs being the main response mechanism to a fall in demand," the secretary of state for employment, Engracia Hidalgo, said.

"In this context, a labor reform along the lines the government is drawing up is more than justified, since it is necessary to restore confidence to workers and businessmen so that they can overcome this crisis, and so that dismissals are the last recourse," the official added.

The government is due later this month to unveil a far-reaching overhaul of the labor market aimed at making it more flexible in order to eliminate an habitual surge in unemployment when the economy turns sour.

Prime Minister Mariano Rajoy was overheard saying at a European Union summit earlier this week that the reforms the government plans to introduce would cost his government a general strike.

The Bank of Spain expects the economy to contract 1.5 percent this year. GDP fell 3.7 percent in 2009 in what was Spain's deepest recession in living memory.