| Consensus | Actual | Previous | Revised | |
|---|---|---|---|---|
| Rate | 7.3% | 6.8% | 7.2% | 7.1% |
Highlights
The Italian labour market showed that the unemployment rate fell to 6.8 percent in the second quarter of 2024. Despite a minor downward tick in labour input per hour in the second quarter by 0.2 percent, employment has continued to increase, with 124,000 additional employed individuals contributing 0.5 percent to the increase in labour input.
A reduction in transient positions by 55,000 people is counterbalanced by a 141,000 increase in permanent employment. The inactivity rate slightly grew, while the unemployment rate decreased to 6.8 percent. The constraints from wage increases and national contract renewals were reflected in the 1.9 percent quarterly and 4.5 percent annual increase in labour costs, which is driven by wages and social contributions. The business sector is experiencing stable job growth, particularly in full-time positions, with a minor reduction in advertised vacancies.
Interestingly, productivity, as measured by the number of hours worked per employee, is experiencing a quarterly decline as labour costs increase, leaving the RPI at minus 8 and RPI-P at 5, in line with market estimates. These trends indicate a labour market that is becoming increasingly constrained, with costs increasing due to structural changes in employment patterns.
A reduction in transient positions by 55,000 people is counterbalanced by a 141,000 increase in permanent employment. The inactivity rate slightly grew, while the unemployment rate decreased to 6.8 percent. The constraints from wage increases and national contract renewals were reflected in the 1.9 percent quarterly and 4.5 percent annual increase in labour costs, which is driven by wages and social contributions. The business sector is experiencing stable job growth, particularly in full-time positions, with a minor reduction in advertised vacancies.
Interestingly, productivity, as measured by the number of hours worked per employee, is experiencing a quarterly decline as labour costs increase, leaving the RPI at minus 8 and RPI-P at 5, in line with market estimates. These trends indicate a labour market that is becoming increasingly constrained, with costs increasing due to structural changes in employment patterns.
Market Consensus Before Announcement
The monthly data already released point to a 7.3 percent second quarter jobless rate, up from 7.2 percent previously.
Definition
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.
Description
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.
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.
