All indications are that unemployment in Greece will continue to rise. The economy has shrunk by around a fifth since the recession started in 2008 and youth unemployment has pushed far above 50 per cent. The economy is expected to enter a sixth year of recession next year.
"This is a very dramatic result of the recession," said Angelos Tsakanikas, head of research at Greece's IOBE economic research foundation.
The state statistics agency said Greece's unemployment rate rose from 24.8 per cent in June. According to European statisticians, that would be the same rate as Spain's in August.
The two countries have the highest unemployment rates among the 17 that use the euro. In August, eurozone unemployment stood at an average 11.4 per cent, itself the highest level since the single currency was launched in 1999.
Greece's statistical authority said 1.26 million Greeks were out of work in July, with more than 1,000 jobs lost every day over the past year. In the worst-affected 15-24 age group, unemployment was 54.2 per cent. In July 2008, a year before Greece's acute financial crisis broke, there were only about 364,000 registered unemployed.
The country's main GSEE labour union said real unemployment is above 30 per cent and growing, which it blamed on "violent" government cutbacks.
After losing access to international money markets and nearly defaulting on its mountain of debt, Greece has survived on international bailouts since May 2010.
However, solvency comes at a harsh price: To secure and continue receiving the loans, Athens imposed tough austerity measures, slashing incomes and repeatedly increasing taxes, in an attempt to get its public finances in order.
The conservative-led government is currently in negotiations with the country's creditors over another raft of austerity measures, worth €13.5 billion ($17.4 billion) over the next two years, so it can get the next batch of bailout funds. Greece has to satisfy certain periodic conditions in order to qualify for the handouts.
Without the money, Greece won't be able to pay all its financial obligations and may end up defaulting on its debts and leaving the euro.
The cutbacks have triggered deep resentment among a population reeling under nearly three years of austerity. GSEE and other main unions have called a new general strike and demonstration next week.
"During a time when unemployment is strangling Greek society and the recession is at 7 per cent, it is at least provocative that (bailout creditors are) focusing on further bleeding workers and pensioners," GSEE said in a statement.
Finance Minister Yiannis Stournaras was holding talks Thursday evening with representatives of the European Union, International Monetary Fund and European Central Bank — the so-called troika. The government still hopes to have struck a deal before next week's EU summit in Brussels, officials say.
The troika has to sign off the package for the release of the funds.
After the late-evening talks, a senior government official said it remained unclear whether agreement on the austerity package could be reached before the Oct. 18-19 meeting in Brussels of European heads of government.
The official said another sticking point was how to cover the cost of a Greek request to extend its fiscal adjustment program by two years to the end of 2016, with the price tag estimated at €12 billion ($15.5 billion).
The official asked not to be named because the negotiations are ongoing.
Some evidence emerged Thursday that the government's strategy is working on one front, at least. Finance Ministry figures showed that the deficit-busting effort is on track despite lower-than-anticipated revenues.
The ministry said the January-September deficit was €12.64 billion, lower than the €13.5 billion target. Although revenues were €1.3 billion off target, spending was €2.2 billion less than budgeted.
All three parties in Greece's governing coalition back the two-year extension, and IMF chief Christine Lagarde on Thursday said she also supports the idea.
"I said repeatedly that an additional two years was necessary for the country to actually face the Fiscal Consolidation Program that is considered," Lagarde told reporters as the IMF and World Bank held annual meetings in Tokyo.
But German Chancellor Angela Merkel, who in a visit to Athens on Tuesday praised Greek progress with reforms but stressed that much remains to be done, said the troika must deliver its report before any decision is made.
"I do not want to comment on every single statement of which we see many during a single day," she said. "This is the base. I now wait for the troika report, then we will forge our position," she said.
Associated Press writer Derek Gatopoulos in Athens contributed.