The European Union's statistical agency, Eurostat, said 88,000 more people were without a job in July — for a total of 18 million — as governments and companies continued to trim payrolls to deal with problems of high debt and weak consumer spending.
The 11.3 per cent unemployment rate, which is up 1.2 points from a year earlier, is the highest level since the euro was formed in 1999.
Joblessness increased in Spain and bailed-out Greece, both countries at the centre of the European sovereign debt crisis which has thrown a cloud of doubt over the future of the single euro currency.
In Spain, the jobless figure rose by another 0.2 points to reach 25.1 per cent, the highest in the eurozone. For Greece, the latest data available was for May, which saw a 0.5-point increase to 23.1 per cent. A year earlier, it was 16.8 per cent.
Youth unemployment was even worse. In Spain it stood at 52.9 per cent for people under 25 and at 53.8 per cent in Greece.
"Partners at all levels need to do all they can to avoid a lost generation which will be an economic and social disaster," said EU Employment Commissioner Laszlo Andor. He cautioned, however, that there was no "quick fix" to the problem.
Europe's economy has been hit by the combination of government savings measures — cuts to public sector payrolls and benefits and tax hikes — and the uncertainty that has caused huge volatility in financial markets. That uncertainty is keeping companies from hiring and investing and scaring households away from big purchases.
European leaders are preparing measures to boost confidence in government finances, hoping that greater stability will allow the economy to recover. But that task is proving long and arduous.
"We must not get used to these excruciatingly high levels of unemployment," said Hannes Swoboda, the president of the Socialist group at the European Parliament. "We have been witnessing constant, creeping increases in unemployment - and especially youth unemployment - for years now. Enough is enough."
The bottom of the eurozone's economic downturn though has yet to be reached, according to Ben May, European economist for Capital Economics.
With job measures "pointing to further falls in employment, the euro-zone unemployment rate looks set to rise further, suggesting that consumer spending will continue to fall over the coming quarters," May said.
In comparison with Europe's figures, Eurostat said unemployment in the corresponding month stood at 8.3 per cent in the United States and 4.3 per cent in Japan.
At the other end of the scale in the eurozone, Germany, the continent's biggest economy, had a rate of 5.5 per cent. Its neighbour Austria had the lowest of all with 4.5 per cent.Suggest a correction