Italy's unemployment rate retreated to 7.6 percent in the second quarter, undershooting consensus forecast of 7.7 percent. That's down from 8.0 percent in the first quarter, revised down from the originally-reported 7.9 percent.

The quarterly improvement may bring little cheer to the Italian government, as monthly data already released showed joblessness rising to 7.6 percent in July from 7.5 percent in June. This broke a multi-month run of declines. Total employment fell by 73,000 at the start of the third quarter, while the employment rate declined slightly to 61.3 percent.

Despite the second quarter decline, the disappointing July data raise Italy's stake in Thursday's European Central Bank decision even further, particularly after revised data showed a higher-than-initially reported 0.4 percent contraction in second quarter GDP.

Italian Prime Minister Giorgia Meloni has criticized the ECB for its"simplistic" approach to hiking interest rates, warning that tighter policy could do more harm than good. Economists expect the governing council to leave its main lending rates unchanged, but recent public statements from more hawkish members of the rate-setting body suggest some rather lively discussions on Thursday. There are also questions over Italy's space for fiscal maneuverability, given its high debt-to-GDP ratio and challenges in doling out Next Generation EU funds.

The monthly data point to a 7.7 percent quarterly rate, down from a probably revised 7.9 percent in the previous period.

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.