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1.2 million euro jobs lost in Q1

Euro zone jobs - Record annual fall
Euro zone jobs - Record annual fall

Figures have shown that the euro zone lost a record 1.22 million jobs in the first quarter of 2009, highlighting the depth of the recession.

The number of employed fell 0.8% compared with the previous quarter to 146.2 million, pulled down by job losses in Greece and Spain, the EU statistics office Eurostat said.

Employment during the first quarter fell 1.2% over a year, the deepest annual drop since measurements started in 1995.

Eurostat also revised down its quarterly employment figure for the last three months of 2008 to a drop of 0.4% from the previously reported 0.3% decline.

Recession-hit factories are closing and laying off workers, despite hundreds of billions of euro in government funds spent on stimulating the economy.

Weak job figures, coupled with the prospect of negative inflation, are likely to convince the European Central Bank (ECB) to keep its main interest rate at a record low 1% for an extended period, or even cut it, economists say.

The euro zone's economic output shrank by a record 2.5% in the first quarter compared with the previous three months, although many economists believe falls in subsequent quarters will not be as deep.

The steepest quarterly falls in employment were recorded in Spain, with 3.1%, Slovakia with 1.9% and Greece 1.8%.