Around 17.4 million people were out of work in the 17-nation euro zone in April, or 11 percent of the working population, the highest level since records began in 1995, the EU's statistics office Eurostat said on Friday.

The level was the same as March, as Eurostat revised upwards its earlier reading of 10.9 percent for the month.

While expected by economists polled by Reuters, the data came as a key business sentiment survey showed the deep slump in manufacturing across the euro zone and appeared to suggest the bloc's economy will shrink in the second quarter of this year.

The bloc narrowly avoided recession in the first three months of this year as the economy stagnated but did not contract. Still, the picture masks the wide divisions in the health of Europe's economy, and the same goes for joblessness.

While unemployment fell in Austria to just 3.9 percent in April, it rose to 24.3 percent in Spain, the highest in the euro zone. New data for stricken Greece was not immediately available, having reached 21.7 percent in February.

The number of people out of work also crept up in both France and Italy to 10.2 percent in April, the euro zone's second and third largest economies respectively.

Joblessness in Germany fell to 5.4 percent of the working population from 5.5 percent in March, although economists say given the weakening business sentiment, even Europe's largest economy cannot expect unemployment to fall much further.

"More uncertainty (from the debt crisis) would surely be poison for the economy and for the companies' willingness to hire staff," Commerzbank analyst Eckart Tuchtfeld wrote in a note to clients.

(Reporting By Robin Emmott)

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