Employment at record highs but slowing down. Here’s what’s happening in the labour market
Employment remains above 24.3 million but has been falling for the fourth month running. According to Istat, the proportion of permanent jobs is rising. There are 48,000 more people looking for work than in July, but a large proportion of these are people who were previously economically inactive, whose numbers have fallen by 21,000.
Employment in August remained at record levels (24,352,000 people in work), but slowed compared with July (-5,000): for the fourth month running, Istat has recorded a slowdown. At the same time, there has been an increase in the number of unemployed (+48,000), accompanied by a fall in the number of economically inactive people (-21,000).
According to Istat, the employment rate stands at 63 per cent; it is falling amongst those aged 25–34 and 35–49, rising amongst those aged 50 and over, and remaining stable amongst those aged 15–24. The unemployment rate (6.2 per cent), again on a monthly basis, is rising amongst 15–24-year-olds and 25–34-year-olds and is stable amongst those aged 35 and over; the inactivity rate (32.7 per cent) has fallen compared with July across all age groups, with the exception of those aged 35–49, for whom it is rising.
Permanent employment is on the rise, driven by a mismatch between supply and demand
Shifting the comparison to August 2025, on a year-on-year basis there are 291,000 more people in employment, but the number of unemployed has also risen by 129,000 and the number of economically inactive has fallen by 381,000. We are witnessing a restructuring of the labour market, with more stable employment evident in both the long-term and short-term trends; this trend is likely the result of businesses’ difficulty in finding the right candidates (the so-called mismatch between supply and demand affects almost one in two planned recruitments), which is driving a move towards stabilising workforce numbers. Compared with August 2025, there are 370,000 more permanent employees, 157,000 fewer fixed-term employees and 78,000 more self-employed workers. Compared with July 2026, the number of permanent employees has also risen (+48,000), whilst the number of fixed-term employees has fallen (-48,000), as has the number of self-employed (-5,000).
Confcom’s research department highlights that, amongst those in employment, ‘permanent employees, who now account for 68.5 per cent of total employment, remain a growing segment. This would suggest that businesses do not foresee a significant slowdown in economic activity in the near future’.
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