Italian Unemployment Rate Rises to Record, Above Forecasts

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Italy’s unemployment rate unexpectedly rose above 13 percent in October, setting a record as businesses refrain from hiring amid the country’s longest recession since World War II.

The unemployment rate rose to 13.2 percent from a revised 12.9 percent the previous month, the Rome-based national statistics office Istat said in a preliminary report today. That’s the highest since the quarterly series began in 1977. The median estimate of seven economists surveyed by Bloomberg called for an unemployment rate of 12.6 percent in October.

The youth unemployment rate for those aged 15 to 24 rose to 43.3 percent last month from 42.7 percent in September, today’s report showed.

Italian Prime Minister Matteo Renzi has been battling labor unions and politicians from the opposition and within his own party to push through reforms to make the labor market more flexbile and eliminate the gap between overprotected workers with open-ended contracts and younger people with no job security.

The proposed reforms are still being discussed by parliament. After the final approval, the government will have another six months to detail the measures and pass them via decrees, meaning the changes won’t be in place until next year at the earliest.

Renzi said today’s increase in the unemployment rate is partly due to more people starting to look actively for a job. The so-called “discouraged” workers who are not looking for work are not counted in the Istat jobless data.

“Unemployment data are worrying,” said Renzi, whose comments on the sidelines of an event in Catania were broadcast by SkyTG24. “We cannot deny the problems out there, still we shouldn’t see the glass half empty either.”

(Updates with Renzi’s comments in sixth, seventh paragraph.)
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