The labour market in Italy exhibited optimistic signals during the first quarter of 2024. A 92,000 quarter-over-quarter surge in permanent positions (up 0.6 percent) and a 32,000 rise in self-employment (also up 0.6 percent) drove a 75,000 increase in the number of employed individuals (up 0.3 percent). These increases more than offset a 47,000 decline in temporary jobs (down 1.7 percent).

Although there was a modest 37,000 increase in inactive individuals aged 15-64 (up 0.3 percent), the number of unemployed shrank by 55,000 or 2.9 percent. This resulted in a slight 0.1 percentage point increase in the employment rate to 62.0 percent, a 0.2 percentage point decrease in the unemployment rate to 7.2 percent, and a marginal 0.1 percent increase in the inactivity rate for those aged 15-64 to 33.1 percent.

The first quarter of 2024 demonstrated a substantial improvement, with a rise of 394,000 employed individuals for a 1.7 percent gain compared to first quarter 2023. Looking back over the year, this represents a substantial improvement. Temporary employment decreased by 4.6 percent, permanent employment increased by 3.1 percent and self-employment increased by 1.0 percent. The number of inactive individuals aged 15-64 decreased by 233,000 or 1.9 percent, and unemployment decreased by 123,000 or 5.9 percent. This upward trend resulted in a 0.9 percentage point increase in the employment rate and a 0.6 percentage point decrease in both the unemployment and inactivity rates.

The future implications of this declining unemployment rate for the Italian economy are primarily favourable. Nevertheless, to completely capitalise on these advantages and guarantee long-term stability and expansion, it will be imperative for officials to implement strategic policy support and meticulous management.

The quarterly data released was in line with the earlier monthly data already released, which point to a 7.2 percent first quarter jobless rate, down from 7.4 percent at the end of 2023.

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.