Italy’s unemployment rate rose more than expected in October to the highest level in 13 years as businesses refrain from hiring after the recession entered its second year.
The unemployment rate rose to a seasonally-adjusted 11.1 percent from 10.8 percent in September, Rome-based national statistics office Istat said in a preliminary report today. Economists had predicted a reading of 10.9 percent, according to the median of eight estimates in a Bloomberg News survey. Unemployment remained above 10 percent for a ninth month.
Italy entered its fourth recession since 2001 in the final quarter of last year. The slump deepened amid the effects of tax increases and public spending cuts passed by Prime Minister Mario Monti’s government aimed at containing the euro-region’s second-biggest debt. The Organization for Economic Cooperation and Development said this week Italy’s economy will shrink 2.2 percent this year. That compares with the government forecast of a contraction of 2.4 percent.
Slumping household demand may have contributed to a drop in consumer prices in November, with the European-Union harmonized inflation rate slipping to 2.6 percent from 2.8 percent the previous month, Istat also said today. Household confidence declined this month to the lowest since records began in 1996 as consumers grew more pessimistic about the economic outlook, Istat said Nov. 26.
The unemployment rate in the third quarter reached 10.6 percent, up from 10.5 percent in the three months through June, Istat said. Monthly unemployment data collection started in 2004.