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Euro zone in it for the 'long haul' as unemployment flat

The underemployed: More than 17 percent of the U.S. employed are part of the part-time economy.
Christopher Furlong | Getty Images
The underemployed: More than 17 percent of the U.S. employed are part of the part-time economy.

Euro zone unemployment numbers point to a tepid regional recovery, analysts said on Tuesday, after official data show unemployment levels remained unchanged in August.

Unemployment stood at 12.0 percent in August, European statistics agency Eurostat said, after it revised its previous figure for July.

Although the actual amount of people unemployed fell for a third consecutive month in August to 19.2 million people — the lowest level since April — this was not enough to lower the 12 percent figure.

(Read more: Whose Job Is It to Tackle Youth Unemployment?)

Ben May, of independent research firm Capital Economics, said the data suggest a continued slow decline in unemployment.

"Since the labor market tends to react to changes in economic conditions with a bit of a lag, the health of the employment outlook may continue to improve over the coming months. Nonetheless, with the employment PMI (Purchasing Managers Index) still below the 50 "no-change" level and economic indicators still consistent with pretty weak growth in the region as a whole, unemployment looks set to fall only very gradually at best," May said in a research note.

Commerzbank Economist Peter Dixon said the unemployment figures indicated the euro zone was many years away from complete recovery.

(View more: European companies are focused on temporary recruitment: CEO)

"It is going to be a long haul and I do not think we can expect any sudden improvements... that is the natures of the kind of recovery we are seeing. We are operating in a world where growth is lacking, and the emerging markets are not going to pull us out of the mire. It is going to be up to Europe itself to generate growth," he told CNBC.

It came as data out on Tuesday showed that factory growth ebbed in September in each of Germany, Italy, Spain, Austria and Greece. Markit's PMI (purchasing managers' index) for the region as a whole fell to 51.1 in September from 51.4, indicating slowing industrial expansion.

Youth unemployment

Eurostat's numbers also highlighted the severe and ongoing problem of high unemployment among under-25s.

In August, the youth unemployment rate was 23.7 percent in the euro zone, slightly down from July's figure of 24 percent but still leaving nearly one-quarter of young people without a job.

Struggling southern European countries remain worse hit, and the latest numbers show that over half of young people in Spain and Greece are still unemployed. In contrast, the lowest youth jobless rate is currently in Germany, at 7.7 percent.

Last month, the head of the International Labor Organization (ILO) warned that Europe faced a "time bomb", as record numbers of young people remained jobless, and said leaders were failing to do enough to tackle the problem.

(Read more: Youth unemployment 'time bomb' ticking in Europe: ILO)

"If we don't get these young people into work it's a demographic time bomb, so there's a bit of schizophrenia around these issues, and the only way out of that schizophrenia is to find ways to get young people into work," ILO Director General Guy Ryder told CNBC at the G-20 summit.

"Youth unemployment is double, triple the overall levels and we need to find those jobs quickly for all sorts of reasons."

It came after German Chancellor Angela Merkel told a a summit of government leaders in July that youth unemployment was the most pressing challenge facing Europe. This followed a move from the European Union to allocated 6 billion euros ($7.8 billion) to tackling the issue, via "durable" vocational training and skills-based education

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Contact Europe: Economy

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