Italian labour market ‘stable’ in fourth quarter of 2025

Italy’s labour market remained broadly stable in the fourth quarter of 2025, according to Istat, the country’s statistics body, with employment showing slight growth and unemployment continuing to decline.

On a year-on-year basis, i.e. compared to the fourth quarter of 2024, the labour input, as measured by hours worked, was up 1.6%.

In Q4 2025, the total number of employed individuals reached 24.1 million in Italy, up by 37,000 compared to the previous quarter, driven by increases in permanent employees (+76,000) and self-employed workers (+21,000).

Temporary employment fell by 60,000 (-2.4%), partially offsetting the gains in other categories. Overall, the employment rate for individuals aged 15–64 remained steady at 62.5%, while the unemployment rate declined to 5.6%, down 0.3 percentage points from the previous quarter. The inactivity rate rose slightly to 33.7%.

Year-on-year growth

Compared to Q4 2024, employment increased by 89,000 (+0.4%), with permanent and self-employed positions driving growth, while temporary jobs fell sharply (-8.6%), Istat noted.

Unemployment dropped significantly by 138,000 (-8.9% over the year), and inactivity among working-age adults rose by 49,000 (+0.4%). These shifts pushed the employment rate up marginally to 62.4%, and the unemployment rate down to 5.5%.

Job growth was observed across enterprise types, with total positions rising by 0.3% quarter-on-quarter. Part-time work grew slightly faster (+0.5%) than full-time (+0.3%), accounting for 28.9% of total jobs. Temporary and on-call positions increased, particularly on-call roles, which rose 5.7% annually. Average hours worked per person declined slightly compared to the previous quarter (-0.5%) but increased relative to Q4 2024 (+0.5%).

The use of short-time working allowances fell to 7.8 hours per 1,000 hours worked, down 1.7 hours from the same quarter in 2024.

Elsewhere, the job vacancy rate stood at 1.9%, up slightly from the previous quarter but lower than a year earlier. Labour costs continued to grow, rising 0.3% quarter-on-quarter and 2.9% year-on-year, driven by higher wages (+2.5%) and social security contributions (+4.2%).

Annual average

As Istat noted, looking at the 2025 annual average, Italy saw an overall increase of 185,000 employed individuals (+0.8%), alongside reductions in unemployment (-88,000) and inactivity (-58,000). Employment and labour input continued to rise, though at a slower pace than in 2024, with temporary layoffs decreasing and overtime slightly increasing.

The average vacancy rate fell to 1.8%, while total labour costs rose 3.6%, reflecting new National Contract renewals and reduced reliefs on social contributions, Istat added. Read more here.