Euro-zone unemployment rate sinks

BRUSSELS, Belgium

The jobless rate in the 12 nations that use the euro hit a new low Friday, falling slightly to 7.7 percent as the economy picks up steam.

The rate had held steady at 7.8 percent for the five previous months despite high growth in the first and second quarters.

Euro-zone unemployment is now at its lowest level since the EU's statistical agency Eurostat started keeping records for the currency area in October 1998.

The data fuels the case for the European Central Bank to raise interest rates by a quarter of a percentage point next week to 3.5 percent in an effort to stem higher prices as spending power grows.

But the jobless rate in the 25-nation European Union did not fare as well, holding steady again at 7.9 percent where it has been stuck since June.

Eurostat estimates that 11.4 million men and women were unemployed in the eurozone in October and 17.2 million in the whole of the EU.

Although the jobless rate in Europe has been falling as the economy picks up, it is far higher than other world economies -- partly a result of European labor laws that can make it more costly to hire and fire. In October, the United States reported 4.4 percent and Japan 4.2 percent.

Europe's largest economy, Germany, reported a provisional figure of 8.2 percent in October, up from the 8.7 percent it reported the previous month.

Eurostat statistics are seasonally adjusted. Using figures that aren't calculated that way, Germany reported Thursday that unemployment fell below 4 million in November for the first time since 2002, with the rate falling to 9.6 from 9.8 percent in October.

France held steady at 8.8 percent -- the highest of any euro economy, although it is France's lowest in more than five years.

French Prime Minister Dominique de Villepin said it was his "firm intention" to get more people working in the coming months. French voters will elect a new president next May.

The lowest euro-zone rates came from Denmark at 3.5 percent, the Netherlands at 3.9 percent and Ireland at 4.2 percent -- the same as the lowest non-euro nation, Estonia.

Counting all EU nations, Poland leads the jobless rate at 14 percent, although that figures has fallen sharply as Poles seek work abroad. Slovakia recorded 12.7 percent and Spain was 8.4 percent.

Britain, Greece and Italy did not report figures for October.