Labour market

The third quarter of 2018 was characterized by a decrease in employment compared with the previous quarter, in a context of falling unemployment and rising inactivity. These economic dynamics of the labour market coincided with a contraction of GDP (-0.1% on a quarter-on-quarter basis) after a period of expansion lasted for fourteen quarters. Economic growth in Italy was slower than that of the economies of the Eurozone countries, which grew by 0.2% compared with the previous quarter. In Italy, the GDP reduction was associated with an increase in labour input both quarter-on-quarter (+0.5%) and year-on-year (+1.2%).

On the labour supply side, in the third quarter of 2018 employment decreased compared with the previous quarter (-52 thousand; -0.2%), as a result of the decrease both in permanent employees and self-employment, not offset by a further increase of temporary employees. The employment rate remained stable at 58.7%. In the most recent monthly data (October 2018), net of seasonality, the employment rate remained static and the number of employees substantially unchanged compared with September 2018, as the result of a fall of self-employment and fixed-term employees, after seven months of growth, and an increase of permanent employees.

The year-on-year trend showed a growth of 147 thousand employed people (+0.6% in one year), concentrated among temporary employees and self-employed (+316 thousand e +53 thousand, respectively), against the decline of permanent employees (-222 thousand). In the third quarter of 2018, the incidence of fixed-term employees on the total number of employees reached 17.9% (+1.7 points). The increase in full-time employment has been continuing for sixteen quarters; the number of part-time workers decreased, with the exception of the involuntary component, whose incidence rose to 64.0% (+2.9 points) of part-time workers and to 11.6% of total employment.

The unemployment rate decreased in comparison with the previous quarter and the previous year, and for both reference periods was associated with the increase in the inactivity rate of people aged 15-64. Conversely, in the monthly data for October 2018, on a short term basis, the unemployment rate and the inactivity rate decreased at the same time.

In the yearly comparison, for the sixth consecutive quarter, the decrease in the number of unemployed continued at a faster pace (-332 thousand in a year; -12.1%), involving both genders, all age groups and widespread throughout the geographical areas. After ten months of consecutive fall, inactive people aged 15-64 rose again (+79 thousand; 0.6%), following an increase among young people.

In the flow data, permanence in employment showed a decrease, especially among young people aged 15-34 and foreign people. Transitions from non-employment were mainly towards inactivity and involved more often young people aged 15-24 and women.

In enterprise data short-term signs of growth of labour demand were confirmed, with an increase in employee jobs by 0.5% on the previous quarter and by 2.1% year-on-year, derived from the growth both in industry and services. The rise in employee jobs was associated with an increase of hours worked per employee on a quarter over quarter basis (0.2%). A decrease of hours worked per employee was observed in comparison with the same quarter of the previous year (-0.1%). In addition, the use of short-time working allowance hours continued to decline. The job vacancy rate remained unchanged either compared with the previous quarter or year-on-year. Labour cost increased by 0.5% compared to the previous quarter and by 2.2% compared to the same quarter of the previous year, as a result of a more marked increase in social security contributions (+1.3% on a short term basis and +4.7% on an annual basis) than that observed for wages (+0.2% compared to the previous quarter and +1.1% on an annual basis).