The number of people out of work in Portugal was down for the first time in two years between April and June.
The jobless rate fell to 16.4 percent from a record high 17.7 percent in the first quarter.
The National Statistics Institute credited an improvement in underlying factors as well as a seasonal pick-up from tourism related summer jobs.
That, and other tentative signs that the country’s long recession is easing, were welcome news for the Lisbon government, which has just survived a political crisis over austerity measures.
“The numbers show an improvement in the underlying health of the labour market,” said Filipe Garcia, head of Informacao de Mercados Financeiros consultants in Porto. “The big risk is 2014, with its budget and the expected reform of the state which even the Bank of Portugal says could have a recessive effect.”
Any hopes that the jobless rate may have peaked look premature.
Unemployment remains higher than a year ago, when it was 15 percent, and the government has said it expects it to top out at 18.5 percent next year after hitting 18.2 percent in 2013.
Well over a third of Portuguese aged 15-24 remain out of work, though the rate for that age group fell to 37.1 percent from 42.1 percent.
The government does not expect the recession to end until 2014 and has predicted a decline in economic output of 2.3 percent this year.