Italy July jobless rate jumps to 9.7%, climbing back above pre-COVID levels

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Italy’s unemployment rate rose to 9.7% in July from an upwardly revised 9.3% the month before, data showed, with the jobs’ market deeply perturbed by the coronavirus crisis, national statistics bureau ISTAT reported.

The rate for June was previously given as 8.8% and a Reuters survey of eight analysts had forecast a July jobless rate of 9.1%.

Tuesday’s figure brought the unemployment rate back above where it had been in January, before the emergence of the coronavirus, when unemployment stood at 9.6%.

The government’s lockdown measures aimed at containing infections brought the economy to its knees, with most firms shuttered throughout March and April.

The official jobless rate fell in those two months, as people stopped looking for work, and hit a multi-year low of 7.3% in April. The subsequent rise reflects the end of the lockdown, which has enabled Italians to return to the labour market.

Only people actively looking for a job count towards the unemployment rate.

ISTAT said 85,000 jobs had been created in July. However, in the same month, 134,000 people entered the jobs market, pushing up the overall unemployment rate.

In the May-to-July period 286,000 jobs were lost compared with the previous three months, ISTAT said.

In July, the youth unemployment rate, measuring job-seekers between 15 and 24 years old, jumped to 31.1% from an upwardly revised 29.6% the month before — the highest level since April 2019. The June figure had previously been given as 27.6%.

Italy’s overall employment rate, one of the lowest in the euro zone, rose in July to 57.8% from 57.6% in June.

Highlighting the devastating impact of the coronavirus on the economy, Italy’s gross domestic product shrank a record 12.8% in the second quarter from the previous three months after contracting 5.5% in the first quarter, ISTAT said on Monday.

The government has pledged more than 75 billion euros in financial support for companies and families, and Economy Minister Roberto Gualtieri has said repeatedly that “nobody must lose their job because of the coronavirus”.

Looking to shore up the employment market, the ruling coalition has banned companies from sacking people until mid-August and has bolstered temporary lay-off schemes to help firms overcome the crisis.

Since February, the level of employment has fallen by almost 500,000 and the number of jobseekers has grown by around 50,000, while the number of inactive people has risen by almost 400,000, ISTAT said.

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