Euro zone unemployment rose to 9.6 per cent in August, its highest in more than 10 years, adding to fears that a nascent economic recovery is likely to be anaemic.
The jobless rate in the 16-country area inched up to its highest since March 1999 as the number of people without work rose by 165,000 from July to 15.17 million, the Luxembourg-based European Union statistics office said on Thursday.
The unemployment level compared with July's 9.5 per cent and was in line with analysts' expectations.
Eurostat said that since August 2008, when unemployment was at 7.6 per cent, 3.2 million people had lost their jobs as companies closed factories and laid off workers during the worst economic crisis since World War Two.
Growing unemployment means private consumption is likely to be weak, so analysts expect any recovery to be fragile. The euro zone economy is forecast to start expanding in the third and fourth quarters of 2009.
Governments have been pouring billions of euros into the economy, hoping to prevent job destruction and long-term unemployment.
Euro zone finance ministers were discussing in Gothenburg, Sweden, today when to end the fiscal stimulus. Some of them, and the European Commission, suggested this should happen from 2011.
Eurostat said that since a year ago, Spain had seen the steepest increase in unemployment in the euro zone, to 18.9 percent from 11.8 per cent. The global credit crunch has pummelled the country's construction sector.
Ireland's jobless rate has almost doubled to 12.5 per cent since August 2008.
In Germany, the euro zone's biggest economy, unemployment rose from 7.2 per cent to 7.7 per cent over the same period.
With consumer prices falling again in September and inflation expectations at record lows, the unemployment data is likely to add to arguments for the European Central Bank to keep interest rates at a record low of 1 per cent.
In the whole 27-country European Union, unemployment rose to 9.1 per cent in August
Reuters