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updated: 10/31/2013 7:03 AM

Italy's unemployment soars to record

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  • Italy's jobless rate rose more than forecast in September to an all-time high as companies failed to hire amid concerns about the persisting recession, the longest since World War II.

      Italy's jobless rate rose more than forecast in September to an all-time high as companies failed to hire amid concerns about the persisting recession, the longest since World War II.
    File photo

 
Bloomberg News

Italy's jobless rate rose more than forecast in September to an all-time high as companies failed to hire amid concerns about the persisting recession, the longest since World War II.

Unemployment increased to 12.5 percent from a revised 12.4 percent in August, the Rome-based national statistics office Istat said in a preliminary report today. The September rate, the highest since the data series began in the first quarter of 1977, was above the 12.3 percent median of ten estimates in a Bloomberg survey.

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Italy's economy shrank in the third quarter, prolonging a record slump that began in 2011 and signaling that the euro area's recovery is bypassing its third-biggest economy, Antonio Golini, the acting chairman of Istat, said this week. He also told an Oct. 29 hearing in Parliament that the nation's gross domestic product will fall 1.8 percent this year. That's more than the 1.4 percent contraction the statistics office forecast in May.

"We see the peak of the unemployment rate around 13 percent and see no evidence of an improvement from that rate next year," Raffaella Tenconi, an economist at Bank of America Merrill Lynch in London, said in an e-mail. "Hiring intentions, though improving, continue to signal a weakening labor market."

The unemployment rate for people between the ages of 15 and 24 rose to a historic high of 40.4 percent in September from 40.2 percent, Istat said today. It had originally reported an August unemployment rate of 12.2 percent.

"Youth unemployment is the true nightmare of our country," Prime Minister Enrico Letta said this month and warned of the risk of a "lost generation."

Letta's government projects the country's unemployment rate will reach 12.4 percent next year, the Treasury said in a report last month. That matches a forecast in a September report by the International Monetary Fund.

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