Italian Employment Rises by 155,000 in Q2 as Unemployment Edges Up to 5.6%

Employment in Italy increased by 155,000 people in the second quarter of 2026, even as the number of unemployed people also rose. Seasonally adjusted employment reached 24.363 million, up 0.6% from the first quarter, while unemployment increased by 31,000, or 2.2%. At the same time, the number of inactive people aged 15 to 64 fell by 185,000, or 1.5%.

The employment rate rose 0.4 percentage points over the quarter to 63.1%, the unemployment rate increased 0.1 point to 5.6%, and the inactivity rate fell 0.5 point to 33.0%. Employment and unemployment can increase at the same time when labor-force participation rises. ISTAT’s sharp drop in inactivity is therefore an important part of the quarterly picture, although the summary release does not identify one-for-one movements between the three categories.

Permanent employment drove most of the quarterly gain

Permanent employees accounted for most of the increase. ISTAT’s September 11 labor-market release showed permanent employment rising by 120,000, or 0.7%, from the previous quarter. Fixed-term employment increased by 18,000, also 0.7%, while the number of self-employed people rose by 17,000, or 0.3%.

More than three quarters of the net quarterly increase in employed people came from permanent employees. The annual comparison points in the same direction. Total employment was 246,000 higher than in the second quarter of 2025, an increase of 1.0%. Permanent employment was up 1.0% over the year and self-employment rose 2.4%, while fixed-term employment declined 1.2%. That mix matters because the annual rise in employment did not depend on an expansion of fixed-term work.

On the enterprise side, employee positions increased 0.3% from the first quarter and 1.3% from a year earlier. Part-time positions rose 0.5% over the quarter, compared with a 0.2% increase in full-time positions, leaving the part-time share unchanged at 28.9%. Over the year, full-time and part-time positions each increased 1.3%, so the overall part-time share was also unchanged from the second quarter of 2025.

Some more flexible forms of work also grew. Temporary employment agency positions increased 2.0% over the quarter and 3.0% over the year. On-call positions were up 1.3% quarter on quarter and 6.7% from a year earlier. The figures show that employment growth was spread across several categories, even though permanent employees made the largest contribution to the rise in the number of people working.

Quarterly unemployment rise contrasts with the annual picture

The 31,000 increase in unemployed people is the main counterweight to the stronger employment figure. On a three-month basis, unemployment rose 2.2% and the unemployment rate edged up to 5.6%. The much larger fall in inactivity among 15- to 64-year-olds is important context for the same period because it shows fewer people remaining outside the labor force.

Compared with the second quarter of 2025, the number of unemployed people fell by 167,000, or 9.8%, while the number of inactive people aged 15 to 64 declined by 140,000, or 1.2%. Employment, meanwhile, was 246,000 higher. ISTAT also reported that the employment rate was 0.7 percentage points higher than a year earlier and the unemployment rate was 0.7 points lower. The quarterly increase in unemployment therefore came against a 12-month backdrop of higher employment and fewer unemployed people.

Provisional July data suggest that employment held close to its second-quarter level after the quarter ended. ISTAT reported 24.370 million people employed in July, with the employment rate at 63.2%. The number of unemployed people fell by 17,000 from June and the monthly unemployment rate moved down to 5.8%. Looking at the overlapping May-to-July period, employment was 91,000 higher than in February-to-April, while unemployment rose by 49,000 and inactivity fell by 144,000. The July reading does not erase the second-quarter rise in unemployment, but it shows a month-to-month decline in the first data available after the quarter.

Hours worked rose while the vacancy rate fell

Labor input increased alongside the headcount. Total hours worked rose 0.3% from the first quarter and 1.3% from the second quarter of 2025. Hours worked per employee increased 0.4% quarter on quarter and 0.7% year on year. Over the same periods, Italian GDP rose 0.2% and 1.0%, respectively, according to ISTAT’s national accounts figures.

Vacancies moved in the opposite direction. The job vacancy rate stood at 1.5% in the second quarter, down 0.2 percentage points from the previous quarter and 0.3 points from a year earlier. Use of short-time working allowances also declined to 6.2 hours per 1,000 hours worked, 0.6 hours lower than a year earlier. The lower vacancy rate is one reason not to read the employment increase as evidence that every measure of labor demand strengthened during the quarter.

Labor costs continued to increase. Total labor cost per full-time equivalent unit rose 0.5% from the first quarter, with wages up 0.4% and social contributions up 0.8%. From a year earlier, total labor costs increased 2.8%, including a 2.7% rise in wages and a 3.4% increase in social contributions.

The labor figures were released against a backdrop of modest economic growth. Italy’s GDP expanded 0.2% in the second quarter and 1.0% from a year earlier. ISTAT’s latest economic note said private consumption and investment supported the quarterly increase, while its second-quarter national accounts put the 2026 carry-over growth rate at 0.8%. Labor input therefore rose slightly faster than output in the latest quarter, while the lower vacancy rate shows that hiring demand did not strengthen uniformly across indicators.

The next monthly employment and unemployment release, covering August, is scheduled for October 1. ISTAT’s next full quarterly labor-market report is due on December 11.