BRUSSELS - The euro zone lost 347,000 jobs in the last quarter of 2009, data showed on Monday, as the 16-country area's economic recovery remained beset by fragility.
The number of employed fell 0.2 percent in the final three months of the year against the previous quarter to 144.3 million, pulled down by job losses in the industrial sector, European Union statistics office Eurostat said. [ID:nBRQ009767]
Employment during the fourth quarter fell 2.0 percent year-on-year.
The data showed that although the euro zone is recovering from the worst economic crisis since World War Two, it continues to shed jobs, hitting people's spending power and undermining future growth.
The 0.2 percent quarterly fall was the sixth in a row, confirming that the modest economic recovery has yet to encourage hiring, said Jennifer McKeown, analyst at Capital Economics.
The euro zone's gross domestic product grew by 0.1 percent in last year's final three months against the third quarter and contracted by 2.1 percent from a year earlier.
Eurostat said employment fell 1.1 percent quarter-on-quarter in manufacturing, 0.4 percent in construction, 0.5 percent in trade, transport and communications and 0.1 percent in the financial sector.
We believe that growth in most countries is unlikely to be strong enough to generate net jobs for some time to come and businesses will consequently be keen to keep their workforces as tight as possible, said Howard Archer, chief European economist at IHS Global Insight.
Employment in the public sector, health care and administration increased 0.2 percent.
The steepest drops were registered in Greece and Spain, both at 0.8 percent. The two countries have been hit especially hard by the crisis, with Greece undergoing a severe austerity programme after years of overspending.
The euro zone's unemployment stayed flat in January from the previous month at 9.9 percent. Joblessness last reached such a level in October 1998.
The data strengthened expectations that the European Central Bank would keep its main interest rate at a historic low of 1.0 percent for many months.
Ongoing soft labour markets in 2010 are likely to hold down wage growth and limit the upside for consumer spending. Consequently, there remains a compelling case for the ECB to keep interest rates down at 1.00 percent for many months to come, IHS Global Insight's Archer said. (Editing by Dale Hudson)