Italy March jobless rate plummets as people give up search for work amid coronavirus crisis

(C) Reuters.

ROME, Reuters – Italy’s unemployment rate dropped steeply to 8.4% in March, the lowest for almost nine years, data showed on Thursday, as people stopped looking for work due to the coronavirus emergency.

February’s jobless rate was revised down to 9.3% from a previously reported 9.7%, national statistics bureau ISTAT reported.

Analysts completely misread likely labour market developments in March, with a Reuters survey of 10 economists pointing to a jump in the jobless rate to 10.5%.

Some 27,000 jobs were lost in March compared with the month before, ISTAT said, while the inactivity rate, measuring people neither working nor looking for work, posted a “strong increase.”

In March 267,000 fewer people were looking for work than in the month before, ISTAT said, accounting for the drop in the unemployment rate, which measures active job-seekers.

March is the first month of jobs data to reflect the impact of Italy’s outbreak of coronnavirus which first came to light on Feb 21.

The government’s lockdown measures aimed at containing infections have brought the economy to its knees, shuttering all firms except those deemed essential for the national supply chain.

It 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.”

In the first quarter as a whole, some 94,000 jobs were lost compared with the previous three months, ISTAT said.

Until the virus outbreak the Italian labour market had held up relatively well, despite an economy which has been broadly stagnant for over a year and contracted by 0.3% in the last quarter of 2019 compared with the previous three months.

However, employment levels had shown signs of weakening around the start of this year.

In March, the youth unemployment rate, measuring job-seekers between 15 and 24 years old, fell to 28.0% from 29.2% to post its lowest level since October last year.

Italy’s overall employment rate, one of the lowest in the euro zone, slipped in March to 58.8% from 58.9 in February, remaining around its highest level since ISTAT’s current series began in 1977.