* May unemployment rate hits 12 pct vs 8.5 pct last year

* About 600,000 people jobless, 43 percent more year/year

* May unemployment jump is biggest on record

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ATHENS, Aug 12 (Reuters) - Greek unemployment posted a record jump in May as austerity policies aimed at slashing the budget deficit lead to job cuts, figures from statistics service ELSTAT showed on Thursday.

The unemployment rate jumped to 12 percent from 8.5 percent in the same month last year. A total 602,185 people were without work, 43 percent more than in May 2009 and the biggest number recorded since Greece started compiling monthly jobless data in 2004.

Employment is expected to suffer as the Greek economy goes through its deepest recession in almost 40 years, partly due to draconian austerity cuts to shore up the country’s finances and avoid a debt default in exchange for a 110 billion euro EU/IMF bailout.

Greece’s jobless rate was the fourth-highest in the 16-member euro zone after Spain, Slovakia and Ireland and 2 percentage points above the bloc’s average.

The EU and the IMF expect unemployment to hit close to 15 percent next year, with the economy suffering its third consecutive year of contraction.

May figures showed unemployment hitting young people hardest, with the jobless rate reaching 32.5 percent in the 15-24 age group and 15.8 percent for those aged 25 to 34. (Reporting by Harry Papachristou; Editing by Hugh Lawson)