IT: Unemployment Rate

Tue Jun 12 03:00:00 CDT 2018

Consensus Actual Previous Revised
Level 11.1% 11.1% 11.0% 11.1%

The jobless rate was 11.1 percent in the first quarter, unchanged from its upwardly revised mark at the end of 2017.

The stability of the headline reading reflected a steady rate for men which, at 10.2 percent, was 0.4 percentage points below its outturn a year ago but masked a 0.2 percentage point drop to 12.4 percent for women, also a 0.4 percentage point fall on the year.

Ominously, the monthly report for April already released showed the unemployment rate ticking back up to 11.2 percent to match its January reading. This effectively leaves a flat trend over the last year and suggests that any further improvements will need a faster pace of economic growth. The newly installed government will be seeking to achieve just that, even if it does mean ignoring EU fiscal rules.

The unemployment rate measures the number of unemployed as a percentage of the labour 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.