Euro zone employment grew year-on-year for the first time since the financial crisis in the last months of 2010, data showed, driven by job creation in the region's core as its periphery struggled.
Employment in the fourth quarter rose 0.1 per cent from the third quarter and 0.3 per cent year-on-year, offering signs of a strengthening labour market that one analyst said should boost growth in consumer spending in Germany, the region's dominant economy.
It was the first annual increase in the typically lagging indicator since the third quarter of 2008, when the collapse of Lehman Brothers triggered a global slump and the euro zone's worst recession in decades.
The number of employed increased in the October-December period to 144.8m, the data from statistics office Eurostat showed.
The agriculture, financial services, public administration, health and trade and transport sectors added jobs over the quarter, while headcounts in construction and manufacturing fell.
Employment increased in Austria, Belgium, France, Germany, Italy and Slovakia, but declined in debt-laden southern European countries Portugal and Spain, as well as in Finland and Slovenia.
No data was made available for euro zone bailout fund recipients Ireland and Greece.
Howard Archer, economist at IHS Global Insight, said there were signs that the euro zone labour market was strengthening modestly after stalling in the third quarter, when it was unchanged quarter on quarter and fell 0.2 percent year on year.
He expected unemployment to remain high across the single currency bloc for some time, containing inflationary pressures and keeping a lid on consumer spending.
"A notable exception will hopefully be Germany. Consumers in Germany are benefiting from elevated and rising employment and higher wage settlements, while it seems likely that there must be an element of pent-up demand after many years of muted spending," he said.
Euro zone growth was 0.3 per cent in the fourth quarter, the same rate as in the third. Euro zone unemployment fell below 10 per cent in January for the first time since December 2009.
City A.M. Reporter