New cold shower for the Italian economy, after yesterday’s reading on inflation as stated by Gabriel Debach, market analyst at eToro.
The data on manufacturing PMIs in the Bel Paese fell in August for the second consecutive month, reaching 48 points. This is the lowest PMI reading in over two years and lower than expected. Moreover, given that, if compared with the August readings of the main European economies, it brings Italy in the penultimate position ahead only of the United Kingdom (46) and below the value of the Euro area (49.6) and above all of France. (50.6) and Germany (49.1).
The key point of the data is the expectation of greater weakness in demand, a factor that indicates greater attention to the issue of recession in Europe, since inflation weighs on the purchasing power of consumers and weakens economic confidence.
If the evolution of the Italian economy is seen to be down, the (provisional) employment marks an improving market, with unemployment falling to 7.9%, which is the lowest value since April 2020. continues to mask a not so clear-cut reality, with a drop in employment of 22 thousand people and a growth recorded only with fixed-term contracts. Certainly not a good prospect for entering a possible future economic recession. Between job uncertainty and the continuous erosion of inflation, the future of the most troubled families is certainly not the brightest.
On the other hand, a positive reading on the GDP front, despite yesterday’s downward revision by Moody’s, with a value growing for the sixth consecutive month. Despite the inflationary pressures on consumption, household spending grew by 2.6%. Despite the depreciation of the euro, which in the second quarter fell against the dollar by more than 5%, net exports continue, both on an economic and trend basis, not to offer support to Italian GDP. Positive reading, better than expected, but which requires caution, concludes Debach.