Inflation Slows Down and Employment Declines: Latest Data and Concerns

Inflation slows down again: in August the race in prices stops at +5.5% per year, down from +5.9% in the previous month. Slowing down, but still at much higher levels, the shopping cart is up 9.6%. The latest Istat data confirm the deceleration phase of inflation in Italy, while in the Eurozone it remains stable at 5.3%, with foodstuffs driving the rises. A trend that continues to weigh on the purchasing power and consumption of families, is the alarm raised by the associations that ask for interventions to support payroll and control price lists. Shadows on the labor market: after seven months of growth, employment fell in July compared to the previous month, with the drop in all contracts but above all in fixed-term contracts. The total unemployment rate rises (to 7.6%, while the youth rate drops to 22.1%) and those who do not have and are not looking for a job increase.

Compared to a year earlier, the employment front still continues to record positive numbers. Front that from tomorrow 1 September will see the start of the new platform for the intersection of supply and demand and Support for training and work, the first post-Citizenship Income tool. In July, in the last month before the stop for households that benefited from it for seven months in 2023 and did not have disabled, minor or over 60 members, households with the Citizen’s Income or Pension were just under 1.4 million, with an average of around 564 euros. Now the new phase is starting: former recipients between the ages of 18 and 59 will be able to access the new Sfl measure and submit the application directly on the Inps website or through the patronages. After which they will be automatically transferred to the new Siisl platform, thus accessing training courses and job offers. In the meantime, the market has to deal with the first monthly drop in employment since the end of 2022: in July it decreased by 73 thousand units compared to the previous month. The number of employed people drops to 23 million 513 thousand, while remaining 362 thousand higher than in July 2022.

The monthly decrease concerns employees (-70 thousand) and the self-employed (-3 thousand), but only involves the 25-49 age group. And looking at the type of relationship, temporary employees are decreasing above all (-62 thousand). The decline in inflation was positive. In August, consumer prices for the entire community (NIC), gross of tobacco, recorded an increase of 0.4% on a monthly basis and 5.5% on an annual basis. The deceleration is due, among other things, to the slowdown in the prices of unregulated energy goods (to +5.7%), which include fuel, gas and electricity on the free market, unprocessed food (+9.2%) and processed (+10.1%). However, this data confirms the “stellar” growth, as consumers say, in the prices of groceries, starting with food and drink. A family with two children spends 777 euros more a year on food alone, calculate Assoutenti and Unc, speaking of a drop “with a dropper”. Federconsumatori fears the price hikes lurking in the autumn. Also for Confesercenti “the recovery process is still at a slow pace” and the erosion of household purchasing power continues, which will lead to “a sharp slowdown” in consumption. However, Confcommercio underlines “the comforting signals” from the inflation side and the expectation that it could drop more significantly in October. On the eve of the GDP data in the second quarter of the year, a negative figure arrives from services: after nine quarters of increase, there is a drop in the turnover of services (-0.5%) compared to the previous three months. On the other hand, the annual variation (+2.8%) remains positive for the tenth consecutive quarter, albeit, underlines Istat, in a marked slowdown.

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2023-08-31 19:44:00
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