Euro zone unemployment remained stable at an 11-year high in October but September jobless numbers were higher than previously reported, showing the labour market has yet to feel the effects of nascent economic recovery.

Unemployment in the 16-country area totalled 9.8 percent of the workforce, unchanged from September's upwardly revised reading, the European Union statistics agency said.

In addition to the euro zone's return to growth in the third quarter and improved business confidence, the rise in unemployment is currently being limited to some extent by government jobs support ... most notably in Germany, said Howard Archer, economist at IHS Global Insight. It was still the highest unemployment rate since the 9.9 percent registered in October 1998, Eurostat said.

Economists polled by Reuters had on average expected a 9.8 percent rate in October against 9.7 percent for September.

A total of 15.567 million people were unemployed in the euro area in October, up by 134,000 against September.

In the whole European Union of 27 member states, the unemployment rate rose to 9.3 percent from 9.2 percent in September. This meant 22.510 million people were out of a job, 258,000 more than in September.

Euro zone unemployment still seems likely to rise significantly higher, thereby weighing down on growth prospects over both the near and medium term, Archer said.

In France, the euro zone's second-biggest economy, unemployment rose to 10.1 percent from 10.0 percent. In Italy, the third-biggest, the figure increased to 8.0 percent from 7.8 percent and in Spain, to 19.3 from 19.1 percent.

In Germany, the region's biggest economy, joblessness fell to 7.5 percent from 7.6 percent.

Unemployment is a lagging indicator, slow to react to economic developments. Analysts expect it to peak around 11 percent next year and have said it will remain a drag on the economy as joblessness dampens wage growth, curbing demand.

This reinforces the case for the ECB (European Central Bank) to only very gradually withdraw its emergency liquidity measures, and to keep interest rates down at 1 percent until deep into 2010, Archer said.

Germany Unemployment