A fall in the number of German jobless drove the eurozone's unemployment rate down to 8.6 percent in July, the lowest in almost 2-1/2 years, the European Union statistics office said on Thursday.
Economists polled by Reuters had expected the unemployment rate to remain unchanged from 8.7 percent in June. Eurostat estimates that 12.5 million people were looking for jobs. The last time the eurozone unemployment rate was at 8.6 percent was in February 2003.
Provisional data showed unemployment in Germany, the biggest of the 12 economies using the euro, fell to 9.3 percent in July from 9.5 percent the month before, while the number of jobless in the second biggest France was flat at 9.7 percent.
July data for third biggest Italy was not available.
Persistently high unemployment has long been a drag on the eurozone's weak growth rates, as it undermines consumer confidence and disposable incomes.
Despite small declines in the number of jobless over the past five months, Germany's high unemployment rate is likely to cost Chancellor Gerhard Schroeder his job in the September 18 elections as the effects of labour market reforms will not come soon enough.
France has also made reducing the number of jobless its top priority ahead of the 2007 presidential polls. Eurostat said unemployment in the eurozone was lowest in Ireland at 4.3 percent and the Netherlands, at 4.8 percent.
The percentage of people without work in the whole of the EU of 25 states also eased to 8.6 percent or 18.7 million workers, in July from 8.7 percent in June.
This compares with a 5.0 percent unemployment rate in the United States and 4.4 percent in Japan.