-Euro zone jobless jump, Q3 GDP may spell momentum loss

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BRUSSELS, Jan 8 (Reuters) - Euro zone unemployment jumped to an 11-year high in November and is likely to rise further this year, adding to the instability of an economic recovery now based on fickle inventory rebuilding and exports.

The European Union's statistics office Eurostat said the number of people without jobs rose by 102,000 in November to 3.041 million, or 10 percent of the workforce in the 16 countries using the euro -- the highest since August 1998.

For a graph of euro zone unemployment see: here

"We think that the unemployment rate will continue to rise until around the third quarter of this year before remaining at these higher levels through 2011," said Nick Kounis, economist at Fortis Bank.

"The upshot is that consumer spending will remain weak for a protracted period and that the overall economic recovery will be slow," he said.

The European Union's statistics agency confirmed its earlier estimate that the euro zone exited recession in the third quarter with 0.4 percent quarter-on-quarter growth after five quarters of falling output. [ID:nBRQ009663]

But the contributions of individual components of gross domestic product changed from those previously reported.

The rebuilding of inventories, severely depleted in early 2009, was stronger than thought and added 0.5 percentage point to the overall result rather than 0.3 percentage point.

Net trade added less than previously estimated -- 0.1 percentage point, rather than 0.2 percentage point.

Investment, which accounts for almost one fifth of the euro zone's gross domestic product turned out weaker than expected and subtracted 0.2 percentage point rather than the previously reported -0.1 point.

Finally household demand, which at 57 percent of the total is the biggest item in euro zone GDP, subtracted 0.1 percentage point from the final quarter-on-quarter figure although it was offset by government spending, which added 0.1 point.

"We suspect that the euro zone's recovery could well lose momentum for a time in 2010 before growth starts to gradually pick up again," said Howard Archer, economist at IHS Global Insight.

This will happen because governments will gradually withdraw some of their stimulus steps including car scrappage schemes and employment support measures, Archer said.

"In addition, inventory developments could start to become less positive towards the middle of the year while the strong euro, high and still rising unemployment, and persistent tight credit conditions amid still significant financial sector problems are also seen as weighing down on euro zone growth prospects," he said.

"In addition, there is a danger that global growth could also falter for a time during 2010, thereby limiting euro zone exports.

Eurostat also revised upwards the year-on-year GDP figure for the third quarter to a contraction of 4.0 percent from 4.1 percent and revised higher the quarter-on-quarter number for the second quarter to a contraction of 0.1 percent from 0.2. (Reporting by Jan Strupczewski, editing by Dale Hudson and Toby Chopra)