Official figures show that Spain's jobless rate shot up to 22.85% at the end of 2011, the highest rate in the industrialised world.
The number of unemployed burst through the five-million mark, surging 295,300 to 5.27 million in the last quarter of 2011, the National Statistics Institute report showed.
As a result, the jobless rate at the end of 2011 surged to a near 17-year record, rising from 21.52% in the previous quarter.
The jobless rate among those aged 16-24 climbed to 51.4% at the end of the year from 45.8% on September 30.
The figures are grim for Spain, widely considered to be sliding in to a recession in 2012 with jobless numbers set to rise even further as the new right-leaning government slashes spending further.
It also makes a stark contrast from the heady days of Spain's property boom, when the unemployment rate fell to just 7.95% in 2007.
The 2008 property bubble collapse and global financial crisis destroyed millions of jobs, left banks with huge bad loans, and Spain's national and regional governments with big debts.
The country's new right-leaning Popular Party government is now struggling to slash a bloated public deficit and avoid being dragged back to the centre of a crisis of confidence in eurozone sovereign debt.
Prime Minister Mariano Rajoy plans €8.9 billion in new budget cuts, tax increases to rake in €6.3 billion, and an anti-tax fraud campaign to recoup about €8.2 billion. But that cost-cutting opens the prospect of even more job losses in hard economic times, with the International Monetary Fund predicting the economy will shrink by 1.7% in 2012 and 0.3% in 2013.
Higher jobless numbers make it extremely difficult to curb the deficit because the state must pay more in unemployment benefits while receiving less income from taxes.
Doubts are now rising over whether Rajoy can fulfil a promise to cut the deficit to 4.4% of gross domestic product in 2012 after the deficit blew out to an estimated 8% of GDP last year.
