Euro-area unemployment unexpectedly retreated from a record high, as the currency bloc’s economic recovery gained momentum.

The jobless rate fell to a revised 12% in July from a record 12.1% a month earlier, and held at that level in August, the European Union’s statistics office in Luxembourg said today.

Economists forecast a rate of 12.1%, according to the median of 30 estimates in a Bloomberg News survey.

Unemployment among young people fell to 23.7% in August, after two months at 23.8%.

Today's report comes after the 17-nation euro economy emerged from its longest-ever recession in the second quarter and economic confidence rose for a fifth month in September. 

At the same time, economists surveyed by Bloomberg predict the jobless rate will peak at 12.3% by the end of this year before falling to 12% by 2015.

"Since the labour market tends to react to changes in economic conditions with a bit of a lag, the health of the employment outlook may continue to improve over the coming months," said Ben May, an economist at Capital Economics Ltd in London.

In Germany, the euro zone's largest economy, unemployment unexpectedly increased for a second month in September in a sign of an uneven recovery in Europe’s largest economy.

The number of people out of work climbed a seasonally adjusted 25,000 to 2.98 million, after gaining by 9,000 in August, the Nuremberg-based Federal Labour Agency has said.

Economists predicted a decline by 5,000, according to the median of 27 estimates in a Bloomberg News survey. The adjusted jobless rate rose to 6.9% from 6.8%.

While the German economy is growing, it is not matching the pace of last quarter when it expanded 0.7%, the Bundesbank said in its monthly bulletin on 23 September.