Unemployment in the euro zone refused to budge in November despite signs of economic growth but analysts predicted more new jobs for the single currency area, potentially helping its recovery to pick up speed.
EU statistics office Eurostat said the jobless rate in the 12 countries using the euro remained at 8.3 per cent, its lowest level since mid-2002, for the third month in a row.
A string of data this week has suggested the jobless rate may start falling faster than so far expected in 2006.
"There are currently growing indications that euro zone labour markets are finally beginning to see genuine, if somewhat limited, improvement," said Howard Archer, an economist with consultancy Global Insight.
High unemployment has stifled consumer demand in the euro zone for years, making its fragile growth dependent mainly on exports and the volatile pace of global economic expansion.
The trend could change in 2006, statistics showed this week, despite an increase last month in the European Central Bank's interest rate to 2.25 per cent from 2.0 per cent.
A survey yesterday showed the euro zone's service sector grew at its fastest pace in 23 months in December and employment growth hit a four-and-a-half year high.
The RBS/NTC Services Purchasing Managers' Index echoed the growing business confidence shown in a companion survey of euro zone manufacturers published earlier this week.
And German manufacturing orders jumped 1.7 per cent month-on-month in November, confounding expectations of a fall.
"Rising employment is key to boosting consumer spending across the euro zone which currently remains very much the weakest link in the region's upturn since mid-2005," Archer said.
The European Commission expects euro zone growth to pick up to 1.9 per cent in 2006 from an estimated 1.3 per cent last year.
Despite falling gradually -- in November 2004 euro zone unemployment stood at 8.8 percent -- the jobless rate is markedly higher than in the United States and Japan where it was 5.0 percent and 4.6 percent respectively in November 2005.
Eurostat estimated 12.1 million people were without work in the euro zone.
In the full, 25-nation European Union, the jobless rate in November was 8.5 percent, also unchanged from October.
Eurostat said Ireland had the lowest euro zone jobless rate of 4.3 per cent in November, followed by the Netherlands at 4.7 percent and Austria at 5.2 percent.
Jobless rates in France and Germany, the euro zone's two biggest economies, were among the highest in the euro zone in November at 9.2 per cent and 9.3 per cent respectively.