(BRUSSELS) - Unemployment in the 15 nations sharing the euro held steady in February at a record low point of 7.1 percent despite slowing economic activity, official European Union data showed on Tuesday.

Although rate, which the EU's Eurostat data agency adjusted to account for seasonal variations, was the lowest on its books going back to 1993, economists said the labour market recovery unlikely to go much farther.

"In all, the latest unemployment figures are broadly encouraging," economist Jennifer McKeown at consultants Capital Economics.

"But given clear evidence of a slowdown elsewhere in the economy, and the recent softening of survey measures of hiring intentions, it seems likely that the eurozone labour market recovery is close to a peak," she added.

Although the eurozone economy has lost pace over the past year, unemployment has so far maintained a gradual decline in the bloc. The jobless rate was down from 7.6 percent in February 2007.

Long a major headache for eurozone politicians, unemployment in the eurozone has gradually eased in recent years since peaking at 9.1 percent of the workforce in March 2005.

Looking ahead, economist Howard Archer at consultants Global Insight said that the employment situation was likely to deteriorate in the coming months as the broader economy slowed.

"Unemployment is a lagging indicator and we suspect that slowing eurozone growth and weaker business confidence will increasingly weigh down on labour markets over the coming months," he said.

In one of the latest signs if weakness, manufacturing activity slowed in March to the lowest level since October, according to a widely watched purchasing managers index on Tuesday.

In the 27-nation EU as a whole, the unemployment rate dipped 6.7 percent in February, down from 6.8 percent in January 2007 and 7.4 percent in February 2007, according to Eurostat.

The EU's statistics office estimated that 16.0 million workers were without a job throughout the EU, including 10.9 million in the eurozone.

Further details - Eurostat

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