Italian unemployment rate eases less than expected

The unemployment rate in Italy eased to 6.3% in January 2025 from the upwardly revised five-month high of 6.4% recorded in December, though it remained slightly above market expectations of 6.2%.

Italian unemployment rate eases less than expected

The data suggests a modest improvement in labor market conditions despite ongoing economic challenges, including high interest rates and subdued industrial output. The number of unemployed individuals fell by 9,000 to 1,621,000 during the period, keeping joblessness close to its highest level since August 2024. Meanwhile, the number of net employed individuals rose by 145,000 to 24,222,000, highlighting continued resilience in job creation. Notably, gains were seen in both full-time and temporary employment, with service sector hiring leading the increase.

Labor force participation rate climbs

At the same time, the labor force participation rate climbed by 0.3 percentage points to 67.1%, marking the second-highest level on record since the series began in 2004. The rise reflects improving labor market engagement, particularly among women and younger workers, supported by government incentives and training programs aimed at increasing workforce inclusion. Despite the positive trends, structural challenges persist. Italy continues to face regional disparities, with unemployment rates remaining significantly higher in the southern regions compared to the north. Additionally, economic uncertainties linked to global trade tensions, tighter fiscal policies, and softening domestic demand could weigh on future job growth. As a result, policymakers remain cautious about labor market prospects, closely monitoring employment trends amid broader concerns about Italy’s economic trajectory.