Employment rates remained mostly stable in the euro area during the third quarter, dropping only by 0.2 percent, while unemployment rate in the U.K. touched its highest since the beginning of the year.
Employment fell by 0.2 percent in both the euro area and the EU27 in the third quarter, compared to the same period last year, according to Eurostat, the statistical office of the European Union.
About 221.2 million people were employed in the EU27, of which 144.5 million were in the euro area, the report said.
Many regions in the EU have been plagued with critical budget deficits, forcing some countries to seek aid with the European Central Bank and the International Monetary Fund. Ireland and Greece, two regions that are currently running on aid, have adopted severe austerity plans, which have resulted in the loss of several jobs.
The fact that Eurozone employment was only stable in the third quarter indicates that companies are still reluctant to take on workers and may well be trying to get as much as they can out of their existing workers, Howard Archer, an economist at IHS Global Insight, said in a note.
Most of the drop was recorded in construction, which saw a 1.1 percent drop in the euro area, and manufacturing, which fell 0.3 percent.
Agricultural employment fell in the euro area but saw a 0.4 percent rise in the EU27.
German employment rose appreciably further in the third quarter, which is good news for hopes that consumers there will increasingly spend and help growth to become more broadly based. Archer said.
There was also a healthy pick up in employment in other northern and central Eurozone economies including France, Austria and Belgium, he added.
Unemployment rate in Greece worsened, with the employment growth rate touching negative 3 percent, from negative 2.4 percent last quarter.
Romania also continued to see negative employment growth worsen.
However, Spain, Bulgaria, Estonia, who have been struggling with negative employment growth for the past three quarters, saw conditions get a little better.
Employment continued to fall in Greece and Portugal, which heightens concern over their growth prospects, Archer said.
Sweden and Malta continued to report strong employment growth, along with France which saw employment growth turn positive for the first time this year.
We remain doubtful that Eurozone labour markets will see major improvement for some time to come so unemployment seems likely to remain high overall, Archer said.
Eurozone growth seems likely to be relatively moderate going forward in the face of tighter fiscal policy, while public sector jobs could well be cut back in a number of countries as part of the fiscal consolidation measures, he added.
UK reported an unemployment rate of 7.9 percent in the three months to October, as the number of people unemployed crossed the 2.5 million mark.
While the number of people employed in the private sector remained unchanged at 23.1 million, over 33,000 people who worked in the public sector lost their jobs during the quarter.
The UK labour market appears to be flagging even before the full force of the public sector job cuts hits, Vicky Redwood, an economist at Capital Economics, said in a note.
Employers began to rely more on temporary workers as the number of part-time employees rose by 26,000 to 8 million, while the number of full-time employees fell by 58,000, the report said.
Employers are increasingly reluctant to hire more full-time workers as the economic recovery remains uncertain and shaky and inflation rates are soaring beyond the 2 percent threshold set by the Bank of England.
Employment growth over the past few months has not translated into a pick-up in pay pressures - average earnings growth in October continued to hover only just above 2 percent, Redwood said.
Overall, we still find it hard to share the OBR's optimism that the private sector will more than offset the looming public sector job losses and expect unemployment to rise quite sharply over the next couple of years, she added.