Spain's unemployment rate at the end of 2011 stood at 22.85 percent, the highest since the first quarter of 1995 when it was 23.49 percent, figures showed Friday.

The unemployment in Spain climbed to a record level of 5,273,600 at the end of 2011, said the Study of the Active Population (Encuesta de Poblacion Activa), or the EPA.

The EPA used a different methodology from that used by the Ministry of Employment in Spain. The Ministry calculated at the end of 2011 that unemployment stood at 4,422,359.

The EPA calculated that 295,300 people lost their jobs in Spain in the last quarter of 2011 to take the total number of people out of work soaring over the 5 million mark.

The EPA findings means that the number of people out of work rose by 1.33 percent in respect to the third quarter of 2011, while a total of 577,000 Spaniards lost their jobs throughout the year, despite a strong summer performance from the tourist sector, which saw almost 10 percent growth in visitor numbers and spending.

Looking at the rise in unemployment sector by sector, the period between October and December last year saw the service sector badly hit with 124,500 jobs disappearing, while the industrial sector was also badly hit with the loss of just over 29,000 jobs.

There was a slight improvement in the agricultural sector with 42,300 new jobs, while construction also saw a slight rise in the number of people in work (2,900).

Worrying the trend for increasing numbers of people who can be considered 'long term unemployed' continued to rise and the last quarter of 2011 ended with a further 201,900 people who have now been out of work for over a year.

A total of 1,575,000 households in Spain, 150,000 more than at the end of September, now have nobody in work with all of the family members unemployed.

Friday's figures are slightly below the 5.4 million people out of work that Treasury Minister Cristobal Montoro predicted on Thursday, but they will only serve to give a greater impetuous to the Spanish government's aim of pressing home a reform of the labor market as quickly as possible.

This week saw Spain's labor unions and employers' organization reach an agreement to limit wage increases to 0.5 percent this year and to 0.6 percent in 2013. They also came to an accord on an agreement over collective bargaining.

However, Prime Minister Mariano Rajoy and his governing Popular Party (PP) are determined to pass far reaching reforms to simplify contracts, which they insist will make the labor market ore 'flexible' and stimulate the creation of new jobs.

Given the PP's policy of across the board spending cuts and tax increases and the predictions from the Bank of Spain that the Spanish economy will shrink by 1.5 percent this year, it is hard to see how any labor reform can produce short term benefits in Spain and unemployment can be expected to rise throughout the current year.

The only temporary fall can perhaps be expected in the summer when the tourist season sees the creation of short term jobs.