Eurozone unemployment reaches high of 10%

The eurozone unemployment rate climbed to a near 12-year high of 10.1% in April as the number of jobless rose 25,000.

Therer was a rising number of people without work in Spain, Portugal and Italy.

Analysts noted that this was the smallest monthly rise since last November. Howard Archer of IHS Global Insight said: "We remain doubtful that the eurozone labour market is on the brink of turning around, although the situation is likely to vary between countries."

Analysts expect it to peak at 11% this year and have said it will remain a drag on the economy as joblessness dampens wage growth, curbing demand. But Deutsche Bank's Gilles Moec said Italy's unemployment stats would not peak until spring next year, with joblessless at 8.9% in April.

Germany bucked the trend as unemployment fell for the eleventh month running in May. Joblessness declined by 45,000 month-on-month, far more than expected as labour reforms paid dividends and a weaker euro boosted exports, although analysts warned that the spreading debt crisis in the single currency zone might weigh on recovery.

"The bogeyman of mass unemployment has been shooed away. Successful labour market reforms, the government's famous crisis tool of short-work schemes and companies' prudence have made the labour market the bright spot of the recession," said Carsten Brzeski, economist at ING Financial Markets.