Euro zone unemployment hit a ten-year high of 9.5% in July and is expected to rise further denting hopes that consumer spending will boost growth.
The European Union's statistics office, Eurostat, said the jobless rate in the 16-country euro currency area climbed to its highest since May 1999 as the number of people without work rose by 167,000 to 15m.
The rise in joblessness was highest in Ireland and Spain, where the global credit crunch has pummelled the construction sector, and in France. Belgium’s unemployment has eased.
In all of the 27 member states, unemployment rose to 9% of the workforce from June's 8.9%, increasing by 225,000 to over 21m people.
Governments have been pouring billions of Euro into the economy, hoping to prevent job destruction and long-term unemployment in the wake of the worst economic downturn since World War II.
Consumer prices fell again last month and consumer inflation expectations are at record lows.
The unemployment data is likely to add to arguments for the European Central Bank to keep interest rates at record low of 1% even if the economy emerges from recession in the third quarter as many expect.
