The unemployment rate climbed from 21.5 percent at the end of the third quarter to 22.8 percent at the end of the year, the National Statistics Institute said.
At the end of the third quarter, 4.9 million were without jobs. Three months later, that figure had risen to 5.3 million, the institute said.
Public workers demonstrated during the week, with pleas for jobs and calls for budget cuts to be reversed, the BBC reported Friday.
Prime Minister Mariano Rajoy's latest budget proposals include cutting spending by $11.7 billion.
Rajoy has also proposed tax increases.
With the Bank of Spain predicting a 1.5 percent decline in the country's gross domestic product this year, some analysts say the government will not meet its goal of reducing the deficit to 4.4 percent of the GDP.