* Czech Jan unemployment jumps to 6.8 pct, vs 6.0 pct in Dec
* Slovak industrial output slumps 16.8 pct yr/yr
* Czech Jan inflation slows to 2.2 pct, near bottom of central bank's target range
* Romanian 2008 trade gap grows 3.4 pct yr/yr
By Michael Winfrey
PRAGUE, Feb 9 (Reuters) - The Czech jobless rate jumped by almost a percentage point in January and Slovak industry showed its worst contraction in a decade, as evaporating demand from the euro zone batters ex-communist central Europe.
Some economists believed the Czechs may have followed Hungary into recession last quarter and the situation is likely to worsen as factories across the region slash tens of thousands of jobs and cut hours, particularly in car and electronics plants.
Czech unemployment rose to a higher-than-expected 6.8 percent of the workforce in January, from 6.0 percent a month earlier and 6.4 percent forecast by the Reuters poll.
"What we're seeing is a recession that has its roots in manufacturing. I'm pretty sure it will spread and engulf the entire economy -- including the retail and consumer side -- over the next six to 12 months," said Neil Shearing, an economist at Capital Economics.
"The feed through will be into a deterioration in the labour market. We've already seen a jump in the Czech jobless rate and I think that will continue and it could get to 10 percent quite easily."
Other data showed Czech inflation slowed to 2.2 percent in January, near the bottom of the central bank's target range, clearing the path for further interest rate cuts to underpin the economy. [ID:nL9192673].
INDUSTRY CRUMBLING
The Czech central bank's 2009 annual inflation target is 3 percent, plus or minus 1 percentage point, and analysts said the slowdown in price growth meant it would most likely continue cutting rates from 1.75 percent now.
"More rate cuts towards 1.25 percent seem likely in the coming months," said Vojtech Benda, senior economist at ING Wholesale.
Other data showed Slovak output fell by 16.8 percent year-on-year in December, the sharpest fall in 10 years [ID:nL9212190].
It was led by an 18.8 percent fall in manufacturing production versus a year earlier, including a 35.7 percent fall in production in the car industry, which makes up more than a fifth of Slovakia's economy.
Regional trade data out Monday showed that falls of up to 30 percent in emerging EU currencies against the euro since the second half of 2008 have begun to unravel wide external imbalances.
But analysts said that while weaker currencies would help trade deficits by making imports more expensive, the idea that they would help the export-dominant region climb out of recession any time soon was misplaced.
In Romania, where the leu has lost 17 percent against the euro, data showed the 2008 trade deficit had grown by a modest 3.4 percent versus a year earlier [ID:nL9243590] , while in Hungary, where the forint has lost 19 percent since the end of July, the December trade deficit shrank 40 percent.
"Any idea that a weaker currency will somehow lead to an export-based recovery seems a bit far-fetched when you've got demand everywhere in the world collapsing," Shearing said. (Additional reporting by CEEU Reuters bureaus; Editing by Toby Chopra)