Following a sharp downward revision to the fourth quarter (now 12.7 percent) the jobless rate declined a further 0.3 percentage points to 12.4 percent last quarter. This was its lowest reading since the end of 2013.
The monthly data released alongside the quarterly figures also showed a 12.4 percent rate in April, down 0.2 percentage points versus its March print to match its lowest level since January. Even so, the April outturn was only 0.1 percentage points short of its outturn a year ago and suggests that while the Italian labour market is probably over the worst, further improvements are unlikely to be easy to come by.
Economic growth finally turned positive in the first quarter but firms are cautious about adding to headcount and will likely remain so until a clear recovery in demand becomes firmly established.
The unemployment rate measures the number of unemployed as a percentage of the labor force. In addition to the quarterly data, a less detailed monthly report is also available.
Unemployment data are published on a quarterly basis and are very old by the time they are released (they are published about 11 weeks after the end of the reference quarter). The data are published both by the number of persons out of work and by the unemployment rate. The unemployment rate is obtained from the ratio between persons seeking employment and the total labor force as measured by the labor force survey (LFS). Italy uses the International Labour Organisation criteria as adopted by Eurostat to compile the data.
Despite the delay in publication of these data, investors can sense the degree of tightness in the job market. If labor markets are tight, investors will be alert to possible inflationary pressures that could exist. If wage inflation threatens, it's a good bet that interest rates will rise; bond and stock prices will fall.
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