Italian unemployment drops for first time this year - data

Italy's unemployment rate dropped for the first time this year to 8.5 per cent in June from 8.6 per cent in May, according to provisional data published by the national statistics agency ISTAT.

The unemployment rate remained steady at 8.6 per cent from March to May, ISTAT said, revising downward a previous estimate of 8.7 per cent for the three months. The unemployment rate among those aged 15-24 also dropped to 27.7 per cent from 28.4 per cent in May.

Italy was able to keep unemployment under control until mid-2009 thanks to a temporary layoff mechanism that allows companies to halt operations for months at a time if business is slow, with workers covered by public unemployment insurance. Over the past year, however, the ranks of job-seekers has grown, rising to more than two million in October for the first time since 2004.

Italy's unemployment rate is nevertheless lower than that of the 16-nation eurozone, which remained at a record 10 per cent in June for a fourth month running.