Eurozone unemployment spiked to a record 10.9 percent in March, piling pressure on governments on Wednesday to shift from austerity-first to growth policies so as to revive the economy.
The figures, up from 10.8 percent in February, coincided with a survey showing manufacturing in the 17-nation eurozone stumbling to near three-year low levels as spending cuts and tax rises push the bloc towards recession.
Almost 17.37 million men and women, 169,000 more than in February, were out of work in March as the unemployment rate rose for the 11th month in a row, hitting a euro-era high, according to the Eurostat data agency.
The Markit Purchasing Managers' Index, a closely watched indicator, fell sharply to 45.9 from 47.7 in March, signalling contraction of the manufacturing sector for a ninth month running.
"That the eurozone is in recession is not news but the fact that the 'level' of recession is not easing at all at the start of the spring is more than worrisome," said ODDO Securities analyst Bruno Cavalier.
"This should be a wake-up call for European leaders who have recently returned to their natural penchant for inertia and 'every man for himself'," he said.
With elections in France and bailed-out Greece on Sunday turning on what governments can do to restore growth as a way out of the eurozone debt crisis, analysts said the latest data highlights the challenge facing them.
The jobless and manufacturing figures "underline the enormity of the challenge facing policymakers to respond to the growing calls for growth across the region," Capital Economics said in a client note.
It pointed out that even though southern eurozone countries were worst affected -- with Spain's jobless rate 24.1 percent according to Eurostat -- there were signs of stronger states such as Germany coming under pressure too.
Europe's powerhouse had a jobless rate of 5.6 percent in March, they said, but a headline increase of 19,000 was only the second rise in 25 months.
"With unemployment rising and industry slumping, a prolonged recession looks much more likely," they concluded.
May Day protests across Europe on Tuesday picked up on the theme, with calls for the focus to be put on jobs as the best way forward while too much austerity only makes the problems worse.
Sony Kapoor, head of the Re-Define think-tank, said recent data confirmed that the eurozone crisis is deepening and its leaders have to change course.
"The question is how long EU leaders will continue to pursue a deeply flawed strategy in the face of mounting evidence that this is leading us to social, economic and political disaster," Kapoor said.
He said that austerity policies cannot work for the whole EU and called for adoption of a "growth pact" which it needs "more than anything else in order to stem the downward spiral of falling growth, rising unemployment and weakening banking systems that has currently taken hold."
European Central Bank head Mario Draghi recently called for just such a growth pact to sit alongside the fiscal compact agreed earlier this year to tighten fiscal discipline across the EU.
However, Draghi was careful to note that a growth compact could not be based on additional stimulus spending and would have to rely on structural reforms -- a point quickly made by German Chancellor Angela Merkel.
Merkel insists that the fiscal compact cannot be renegotiated, as called for by Socialist presidential front-runner Francois Hollande in France, but has conceded that growth would be on the June EU summit agenda.
Controversy about austerity and growth in the European Union turns on the views of some who say that a return to sound finances will generate growth through structural reform, and those who say that extra stimulus is needed.
This dilemma was likely to feature in a keynote television debate in France on Wednesday between right-wing President Nicolas Sarkozy and Hollande before the final round in the presidential election on Sunday.
[A man looks at job listings at an employment centre in Berlin via AFP / Odd Andersen]