Spain announced Friday that its unemployment rate broke the 25-percent barrier for the first time as austerity cuts squeezed the recession-struck economy.

Tens of thousands of jobs were destroyed in the third quarter, even as Prime Minister Mariano Rajoy's government raised taxes, cut spending and pondered whether to snatch a eurozone rescue line.

The unemployment rate rose to 25.02 percent in the third quarter from 24.63 percent in the previous three months, a National Statistic Institute report showed.

Among workers aged 16-24 the jobless rate towered at 52.34 percent in the third quarter, only slightly down from 53.27 percent in the previous quarter, the institute said.

After more than a year of recession, the soaring jobless figures and biting cuts have prompted growing street protests and unions have called a general strike for November 14.

A total of 5.78 million people searched in vain for work in the July-September quarter, up 85,000 from the previous three months, the official data showed.

The number of Spanish households in which every member is out of work climbed to 1.74 million -- or one in ten of Spanish homes.

Spain's jobs drama is being fed by a recession that is now moving into a second year, according to the Bank of Spain.

The economy has been shrinking since mid-2011 and is expected to decline again in the third quarter of 2012 at a rate of 0.4 percent, the same as in the previous three months, the central bank said this week.

Rajoy's right-leaning Popular Party government has predicted an unemployment rate of 24.6 percent at the end of the year.

The government has declared its determination to slash the budget deficit come what may, however.

Spain, the fourth-largest economy in the 17-nation single currency area, has launched a vast austerity programme to save 150 billion euros ($194 billion) between 2012 and 2014.

After missing last year's deficit-cutting target by a large margin, Spain promised to lower the overall deficit to 6.3 percent of economic output this year and to 4.5 percent of output next year.

But already Madrid has been forced to admit that the cost of a banking sector rescue will push the shortfall to 7.4 percent of gross domestic product in 2012.

Rajoy's government is predicting the economy will shrink by 0.5 percent next year, a far more optimistic outlook than most private forecasts centred on a 1.5-percent slump.

If the economy fares worse than Madrid anticipates, the government may be forced to take even tougher austerity measures to meet its deficit-cutting commitments, the central bank has warned.