Italy's Jobless Rate Falls to Three-Year Low in Boost for Renzi

  • Data support optimism on effect of revised labor rules
  • Manufacturing PMI rose in December, lifting output expectation

Italy’s unemployment rate unexpectedly fell to its lowest in three years in November, supporting Prime Minister Matteo Renzi’s view that his government’s policies are favoring job creation.

The rate dropped to 11.3 percent from 11.5 percent in the previous month, national statistics agency Istat said Thursday in Rome. The median estimate in a Bloomberg survey of four analysts called for 11.5 percent.

Renzi has overhauled Italy’s labor code with the aim of making firing and hiring easier. The legislation also uses tax breaks to reward those employers who hire people on an open-ended basis.

The Markit/ADACI manufacturing purchasing managers’ index rose in December, boosting expectations of a revival in investment and industrial output this year.

Still Renzi has a long way to go to reach sustainable growth. Production fell in November and December, employers’ lobby Confindustria said in an estimate on Monday. The nation’s growth pace slowed in the third quarter of 2015.

Consumer and business confidence declined in December. Italy’s inflation slowed last month with the European Union harmonized annual index down to 0.1 percent, signaling a potential weakness in the consumption component that had been boosting growth in the first three quarters.

Youth joblessness fell in November to 38.1 percent from 39.3 percent in the previous month, Istat said in the report. The rate is the lowest since June 2013.

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