By Steve Scherer

ROME, Feb 1 (Reuters) - Italy's unemployment rate stayed at a near 13-year high in December and data suggested that many unemployed people had now stopped looking for work, viewing they had little chance of finding a job in the recession-hit economy.

The euro zone's third-largest economy has been in recession since mid-2011 and with the unemployment rate above 11 percent and expected to rise, job creation will remain at the forefront of campaigning ahead of this month's general election.

The seasonally adjusted unemployment rate was 11.2 percent in December, equal to the revised levels of the previous two months and the highest seen since the first quarter of 1999, statistics office ISTAT said on Friday.

The economic downturn has been aggravated by austerity measures that outgoing Prime Minister Mario Monti introduced to stave off the debt crisis that threatened to engulf the country.

Nearly three million people are out of work and though the jobless rate was unchanged in December, there were 104,000 fewer people working compared with November and 278,000 fewer workers from a year earlier, according to seasonally adjusted numbers. The total number of registered unemployed was 2.875 million, with 22.723 million people in a job.

The number of people who stopped looking for jobs increased in December by 81,000, or 0.6 percent, from the previous month.

'These figures are not encouraging,' said Paolo Pizzoli, senior economist at ING Financial Markets in Milan.

'They show that who loses a job now stops looking for a new one. People have little confidence they will find another job in this market even if they search for one.'

Monti is running for a second term in the Feb. 24-25 election, promising to cut payroll taxes to try to create jobs. The centre-left, which is leading in polls, and Silvio Berlusconi's centre-right bloc are also pledging to focus on job growth.

'The problem of unemployment was already a central point of the electoral debate, and these numbers will make it even more tangible,' Pizzoli said.

Italians face several more months of recession and rising unemployment after they cast their ballots next month, a Reuters poll showed on last week.

The poll forecast the unemployment rate would increase through to the third quarter of this year, peaking at 11.6 percent.

The December unemployment figure was in line with the median forecast of 11.2 percent in a Reuters survey.

The employment rate was down slightly at 56.4 percent from a revised 56.6 percent in November. The youth unemployment rate fell marginally to 36.6 percent in December from a revised 36.8 percent the previous month.

(Additional reporting by Elvira Pollina in Milan; Editing by Susan Fenton) Keywords: ITALY JOBLESS/

(steve.scherer@thomsonreuters.com)(+39-06-8522-4369)

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