Euro zone employment fell by 0.2% in the fourth quarter, new figures showed on Monday, better than expectations of a 0.5% drop.

In the same period, the number of people employed in the European Union decreased by 0.3%. In the third quarter of 2009, employment declined by 0.5% in both zones.

European Union statistics office Eurostat estimates that 221.1 million men and women were employed in the EU in the quarter, of which 144.3 million were in the euro area.

Falls in employment were recorded in manufacturing (-1.1% in the euro zone and -1.0% in the EU), construction (-0.4% and -0.7% respectively) and trade, transport & communication services (-0.5% in both zones).

Financial services & business activities fell by 0.1% in the euro area, but grew by 0.1% in the EU. Agriculture increased by 0.5% and 0.1% respectively.

'Dispute the recent very welcome slowdown in job losses, we suspect that Eurozone unemployment will rise gradually over much, if not all, of 2010,' said Howard Archer, chief UK economist at IHS Global Insight.

'We believe that growth in most countries is unlikely to be strong enough to generate net jobs for some time to come and businesses will consequently be keen to keep their workforces as tight as possible.'

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