The number of people considered long-term unemployed - out of a job for more than a year - increased to 3.5 million while the unemployment rate for those under 25 was a staggering 57 percent. The government body also said its survey found the number of households without anyone working had risen by 72,400 to 1.91 million.
"The situation is really bad; with all the cuts that there have been, there are families that are going through a bad time because a lot of families have all the members unemployed and they don't have any income," said shop assistant Rodrigo Limpias, 30.
Labor Ministry employment secretary Engracia Hidalgo described the figures as "dramatic" but said the government was working nonstop to make Spain a job creator once again.
Spain has been in recession for much of the last four years as it struggles to deal with the collapse of its once-booming real estate sector in 2008. In the previous decade, its economy was thriving, generating millions of jobs.
In just over a year in office, the conservative government has launched a series of financial and labor reforms and pursued a raft of spending cuts and tax increases that have managed to reduce a swollen deficit. Even so, the country had the highest budget deficit among the 17 European Union countries that use the euro in 2012.
Prime Minister Mariano Rajoy has acknowledged that 2013 will be a bad year but insists that it would have been worse without the reforms. The International Monetary Fund indicated last week that Spain's economy will contract by 1.6 percent this year.