Italy's hung parliament could have even greater repercussions after a series of macroeconomic indicators released on Friday reveal that the Italian economy could face some additional hardships in the coming months.

The unemployment rate spiked to 11.7% in January compared to a revised 11.3% in December and the 11.3% expected by analysts in a Bloomberg survey. The reading confirmed a deteriorating jobs market shortly after PMI (Purchase Managers' Index) data pointed to a continued drop in employment within the manufacturing sector.

Bloomberg pointed out that the unemployment rate is the highest since at least 1992.

Italy's seasonally-adjusted PMI fell to 45.8 in February from 47.8 in January. It was the lowest reading since November and the nineteenth consecutive reading below 50, the threshold that separates an expanding economy from contraction.

"After climbing in January to a ten-month high and suggesting Italy's manufacturing sector was edging towards a return to growth, the headline PMI dropped in February as output levels and new orders both fell at faster rates," said Markit economist Phil Smith.

According to analysts at Digital Look, the latest economic data for Italy could add pressure to the country's need for real reforms.

"However, the stalemate in Italian politics could hinder much needed measures from being passed and could spell further trouble for the Italian economy," they said.

JP

Related share prices