Dublin: Government Hit By Lower Jobs Growth Than Expected

* Estimated data had seen unemployment falling to 11.8 pct

* Government hit at polls despite months of stronger data

* Solid (KOSDAQ: 050890.KQ - news) jobs growth still set to continue - economist (Adds details, analyst quotes)

By Padraic Halpin

DUBLIN, May 26 (Reuters) - Ireland (Other OTC: IRLD - news) 's unemployment rate fell less than expected in the first quarter, data showed on Monday, dropping only slightly to 12 percent, in another blow to the government after bruising local elections at the weekend.

Unemployment eased back from 12.2 percent the previous quarter and has now fallen for eight successive quarters from a high of 15.1 percent two years ago. But support for Ireland's coalition government fell sharply in local and European polls as voters registered their resentment over six years of relentless austerity.

The governing parties desperately need people to start feeling the effects of a tentative recovery but the fall on Monday failed to match the 11.8 percent estimated in monthly unemployment claims data, which would have taken the rate down to the euro zone average.

The government must implement one last round of tax hikes and spending cuts in October to cut its still-high budget deficit and prime minister Enda Kenny said on Sunday any hope of easing the cuts depends upon the strength of the economy.

"The upward revision in the unemployment rate to 12 percent looks a little disappointing, as does the marginal 0.1 percent jobs gain on the quarter - especially given exceptionally strong surveys of companies' employment intentions," said Conall Mac Coille, chief economist at Davy Stockbrokers

"But excluding an erratic fall in part-time work, the underlying picture of strong improvements remains. We're still confident that the Irish labour market is improving but today's data don't provide the headline-grabbing figures the government might have hoped."

The number of people in work rose by just 1,700 or 0.1 percent quarter-on-quarter, compared with a 10,600 gain in the fourth quarter of last year, the Central Statistics Office said on Monday.

Almost two thirds of those in unemployment are classified as long-term unemployed having been without a job for over a year, although that rate has also begun to creep down in recent quarters.

Separate figures on Monday showed visitors to the country rose by 7.5 percent in the three months to end-April, a boost for retailers and hoteliers.
(Reporting by Padraic Halpin; Editing by Ruth Pitchford)