Unemployment in the 19-country euro zone fell slightly in January but the figures will be cold comfort for a region seeing slowing growth, business activity and exports and dismal inflation data.
In January, the unemployment rate was 10.3 percent in the euro zone, down from 10.4 percent in December, the lowest level since August 2011, according to Eurostat.
Continuing a long-term trend, the lowest unemployment rates were recorded in Germany (4.3 percent) and the highest in Greece (24.6 percent) and Spain (20.5 percent), the statistics agency said.
Earlier on Tuesday, euro zone manufacturing data was released, dashing hopes of an improvement in the sector. Instead, Markit's manufacturing purchasing manager's index (PMI) fell to a 12-month low in February as expansions in production, new orders, new export business and employment "all lost momentum," Markit said.
Worryingly Germany was among most disappointing country-specific data with its manufacturing PMI hitting a 15-month low at 50.5. The 50-point mark separates contraction from expansion.
The data just adds more gloom to the euro zone's economic outlook after consumer prices fell sharply in February to minus 0.2 percent, amid a slump in energy prices, putting more pressure on the European Central Bank to increase its stimulus measures.
Remarking on the latest employment data and outlook for the region, Howard Archer, chief U.K. and European economist at IHS Global Insight said it remained to be seen whether the jobless rate can "keep falling given a recent softening in business confidence and stuttering growth."
However, looking on the positive side, he said: "The marked overall drop in euro zone unemployment through to January, together with negligible inflation/deflation should be supportive to consumer spending, which will hopefully allow it to play a key role in helping euro zone growth regain momentum after stuttering recently."