Italy Jobless Rate Falls, Factory Growth Picks Up

Italy’s jobless rate fell to the lowest in almost six years, boosting the country’s month-old populist government.

Unemployment dropped in May to 10.7% from a revised 11% the month before, Rome-based national statistics office Istat said in a preliminary report on Monday. The rate was well below the 11.1% median of 10 estimates in a Bloomberg News survey.

Prime Minister Giuseppe Conte’s government was sworn in to office on June 1, with a promise to improve economic growth through more domestic demand and the creation of favorable conditions for exports.

Italy’s unemployment rate remains far above the rate of 8.5% for the eurozone as a whole in April. The May figure is due for release later in Luxembourg.

“Less work and less income have led in the last decade to a strong increase in poverty, despite recent employment improvements,” the Italian employers’ association Confindustria said last week.

Italy’s economic recovery accelerated in 2017 when the gross domestic product expanded 1.5% or the most since 2010. The euro region’s third-biggest economy is forecast to grow at the same pace this year.

The May unemployment rate was the lowest since August 2012, when it was also 10.7%. Istat initially reported an unemployment rate of 11.2% in April.

Youth unemployment fell to 31.9% in May from 32.8% the month before.

Meanwhile, Italy’s manufacturing growth improved in June, driven by stronger rises in output and new orders, survey data from IHS Markit showed Monday, RTTNews reported.

The headline purchasing managers’ index, or PMI, rose to 53.3 in June from 52.7 in May. However, any reading above 50 indicates expansion in the sector.

Among components, output was raised at a rate that broadly matched the survey’s trend, while new business increased to the greatest degree since March.

Employment also rose at a marked rate, which meant firms were able to comfortably keep on top of their workloads.

Although remained in positive territory, business confidence deteriorated to its lowest in over five years.

On the price front, input price inflation accelerated to a 4-month high in June amid reports of higher raw material prices, especially for steel.