Berlin  - Unemployment in the 16-member eurozone hit its highest level in more than a decade in August, data released Thursday showed.

Despite signs that the currency bloc is on course to an economic recovery, Europe's statistics office Eurostat said the numbers out of work climbed to 9.6 per cent in August as another 165,000 people lost their jobs.

Unemployment stood at 9.5 per cent in July. The August increase was in line with analysts' forecasts.

Coming in the buildup to next week's meeting of the European Central Bank, the latest unemployment data is likely to reinforce analysts' expectations that eurozone interest rates are on hold well into the new year.

At the same time, Eurostat said the jobless rate in the broader 27-member European Union (EU) edged from 9.0 per cent in July to 9.1 per cent in August, its highest rate since March 2004.

Economists are warning that European unemployment could rise next year as economic growth in the region turns in only a modest recovery from the recession that engulfed the global economy earlier this year.

A rise in unemployment could also impact on recovery as rising job fears undercut private consumption.

There are now 21.872 million people out of work in the Brussels-based EU bloc after the region's jobless ranks swelled by 236,000 in August. About 15 million are now without jobs in the 16-member economy built around the euro.

EU unemployment stood at 7.0 per cent in August 2008. The jobless rate in the eurozone stood at 7.6 per cent in August last year.

At 18.9 per cent, Spain had the highest unemployment rate in the EU in August, with Latvia (18.3 per cent) coming in a close second. (dpa)