Eurozone unemployment hits 10-year high

The unemployment rate in the 16 countries using the euro climbed to a 10-year high of 9.5 percent in May, according to official EU data released on Thursday.

A man carries a coffin on which is written "IMF politics" next to an EU flag on which is written "20 million unemployed" during a protest to demand action to combat the economic crisis and rising unemployment in Madrid, May 2009. The unemployment rate in the 16 countries using the euro climbed to a 10-year high of 9.5 percent in May, according to official EU data.

Some 273,000 jobs were lost across the eurozone in May as the unemployment rate rose to the highest point since May 1999, the European Union's Eurostat data agency estimated.

Although activity in the recession-hit European economy is beginning to pick up, many companies are continuing to cut jobs in order to survive the worst post-war downturn.

The May unemployment rate was up from 9.3 percent in April and 7.4 percent in May 2008.

Meanwhile, in the 27-nation EU the unemployment rate rose in May to 8.9 percent, hitting the highest level since June 2005 as 385,000 jobs were lost.

Eurostat estimated that in total 21.5 million people were unemployed across the EU in May, of which 15.0 million were in the euro area.

Looking ahead, Jennifer McKeown at research outfit Capital Economics said: "survey measures of hiring intentions point to a further easing in the rate of job cuts to come.

"But given that labour market developments tend to lag behind those in the wider economy, unemployment almost certainly has considerably further to rise. We expect the rate to reach about 12 percent next year," she added.