Unemployment in new European Union member Estonia dropped to 5.4 percent in the third quarter, continuing its downward trend, the national statistics office said Wednesday.

In the same period a year ago, unemployment stood at 7.0 percent of the workforce, and in the second quarter of this year it was 6.2 percent.

"Unemployment has decreased since 2001, but in last two years the decrease has been especially rapid," the statistics office said in a statement.

"In the third quarter of 2004 the unemployment rate was still at 10 percent, so in the third quarter of the current year, it is nearly two times smaller," it said.

Estonia was one of 10 mainly former communist countries to join the EU in May 2004.

Unemployment fell most sharply in northeastern Estonia, the region which has traditionally the highest jobless rate in the Baltic state, the statistics office said.

Eighteen percent more people of working age had jobs in the northeastern region in the third quarter of this year than during the same period in 2005.

The fall in the jobless rate was attributed mainly to growth in the services sector, the statistics office said.

In the industrial sector, employment increased only in construction, where 21 percent more people were employed than in the same quarter a year ago.

The number of persons employed in the agricultural sector decreased.

According to data compiled by the Estonian Labour Force Survey, 37,000 Estonians aged between 15 and 74 were unemployed in the third quarter of this year -- a fall of 9,000 from the same period a year ago.

The survey also showed that the number of "economically inactive" people -- students, pensioners, homemakers and "discouraged persons who have lost hope of finding a job" -- fell by 29,000 from the third quarter of last year to 363,000 in the same period this year.