Renewed demand for temporary labor across the eurozone offers an early indication unemployment is nearing its recessionary peak, say economists, even as it rose for a 25th consecutive month in April.

Eurozone unemployment reached a seasonally adjusted high of 10.1 per cent in April, highest level since 1999, according to Eurostat, the European's Union's statical arm.

Although the headline edged up from 10 per cent a month earlier, the increase in unemployment rose by the second smallest amount in more then two years- just 25000 out of 15,9m total jobless, compared with swelling over half a million a month in the worst of the downturn.

The latest data highlight how the European labor market has seen less impact from the crisis than the US jobs market.

The Eurozone data led economists to suggest peak unemployment in the region would be below the 10.5-11 per cent previously expected.

Perhaps the most significant indicator that unemployment may have peaked is a set of robust figures in the temporary agency workers sector. Eurociett, which represents unemployment agencies in Brussels, told the European Commission yesterday the agency work market in the eurozone's largest economies grew at double-digit rates in the first quarter compared with a year ago. This was the first year on year increase since the downturn's start.

Such data provide an early gauge of long-term demand for permanent labor. By contrast, unemployment can take several months to adapt to new economic circumstances.

"Temps are first out the recession, first in when the recovery comes," said Dennis Pennel, Eurociestt's managing director.

Paul Swaim, an economist at the Organization for Economic Co-operation and Development says, "In the last several recessions, the trend has been that temporary workers lead on the way up, but they also lead on the way down, so its definitely interesting to see how their employment prospects are evolving."

After 23 months of year on year contraction in France, hours billed by temporary staffing agencies rose 4 per cent in February, and 12 per cent in March. Hours rose 24 per cent in Germany and 20 percent in Italy in March, after more modest rises in February.

The dept of the economic crisis means overall hours worked are still far below pre-2008 levels. Much of the demand comes from the manufacturing sector, which has fared better partly because the devaluated euro boosts exports.

"It's early stages but we are seeing green shoots."  Said Mr Pennel. "Our industry is recovering but we have to be cautious as the trend is still new."

Mr Swaim warned the pattern of recovery in the labor market could be different. More than 2m eurozone employees took part in state-sponsored short time working schemes in the past two years. "In the recovery, companies will be able to expand output without hiring simply by increasing the hours of the existing workforce," he said.

The effect, said Ronald Janssen, Economist at theEuropean Trade Union Confederation, was that the level of economic growth needed to generate new jobs would be raised. "In the last decade, it was thought you needed around 1.5 per cent to stabilize employment. In the recovery, the figure could be closer to 2.5 or 3 per cent," he said.

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