Unemployment Rate Below Consensus in May, Employment Growth Solid

The Italian unemployment rate reached new historical lows in May, at 6.8% (vs 6.9% cons). April’s reading was also revised a tenth lower to 6.8%.

• On a 3mma basis, the unemployment rate dipped to 6.9% after April’s 7.1%.
• The unemployment rate remained at low levels in spite of a slight tick up in the prime-age inactivity rate to 33.1% (vs 33.0% prior).
• The prime-age employment rate was 62.2% (vs 62.3% in April, 62.2% in March), while employment growth on a 3m/3m basis was strong at 0.6% (vs 0.6% prior).
• In May, the European Commission’s expected employment indicator rose 2.3 points to 107.6, which may explain some of the growth in the hard data.
• However, the June vintage of the EC survey saw this indicator fall back to 104.2, driven by a sharp fall in retail expected employment.
• As such, there remain some risks that the current momentum in the labour market may soon soften.
• However, the market continues to exhibit an underlying strength that should underpin household consumption in the quarters ahead.