Highlighting the major contrasts in Europe’s economic recovery, Italy’s jobless rate has hit a record, even as German unemployment fell more than expected.
In February, there were 3.3 million registered unemployed in Italy, which was up nine percent from the same month last year.
Youth unemployment – that is job-seekers between 15 and 24 years old – was 42.3 percent in February. It was down from 42.4 percent in January, but still close to its highest level in 37 years.
That underlines the challenges facing new Prime Minister Matteo Renzi, who said: “There were 365,000 fewer people employed in that 12 month period. It’s as if we had lost 1,000 jobs every day. This is clearly a problem. We’re seeing signs of recovery, sure, but it’s not enough.”
Renzi has promised to make cutting unemployment the top priority for his government.
“We want to get under 10 percent in the coming months, the coming years,” he told a joint news conference in London where he was meeting with British Prime Minister David Cameron.
Renzi is expected to unveil a new ‘Jobs Act’ that aims to lower labour costs and simplify the complex system of employment contracts widely blamed for deterring Italian employers from hiring new staff.
Adjusted for seasonal factors like weather, Italy’s jobless total was 13 percent of the workforce in February, more than one percent higher than the eurozone average which for that month was just confirmed at 11.9 percent.
By contrast, the seasonally adjusted number for Germany was 6.7 percent of the working population in March.
It was the fourth consecutive month that German unemployment fell and the reading for February was revised down from 6.8 to 6.7 percent.
Frank-Jürgen Weise, the head of the Federal Labour Agency, told a news conference: “Unemployment declined again in March. Employment and social security contributions are increasing. The demand for workers continues to rise and is at a high level.”
Economists said the strong labour market should boost private consumption in Germany, particularly as it is combined with moderate inflation and low interest rates which encourage consumers to spend rather than save.
“The German labour market is well on track and that raises the risk the labour market is getting a bit tighter, so there’s a chance this will lead to higher wage increases,” said Christian Schulz, economist at Berenberg Bank.
He added that strikes by airline pilots and public sector workers pointed to the employees’ strength in wage negotiations.
The German government is relying on domestic demand to prop up growth this year as exports are expected to drag.