In February, the number of employed people stood at just under 22.2 million, broadly stable from January, but down by 945,000 compared with February 2020, national statistics office Istat said.
The labour market slump was widespread, affecting male and female workers, salaried workers and the self-employed, and “all age groups”, it said.
Over the same period, the unemployment rate rose slightly, from 9.8 percent to 10.2 per cent, but the ranks of those out of work and not looking for a job swelled dramatically.
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Francesco Seghezzi, a labour market expert who leads the Adapt think tank, said “one million jobs [lost] in a year is an enormous figure”.
Noting that the crisis was hitting younger people and those with precarious jobs hardest, he warned that a “rebalancing is needed, or a generation is at risk”.
The number of so-called “inactives” rose by 717,000, to more than 14 million. But they are excluded from unemployment statistics – thus explaining the modest rise in the jobless rate.
Italy in February this year recorded its biggest contraction in GDP since the end of World War II, marking one of the worst economic slumps in Europe.
Cgil, the country’s main trade union, called Tuesday’s labour data “tragic” and said it justified a further extension of temporary welfare measures introduced to soften the impact of the pandemic.
The government has tried to protect workers by subsidising furlough schemes and prohibiting employers from firing staff.
That ban is currently valid until late June, and was extended to late October for some industries.
Small business owners and employees protested in cities across Italy on Tuesday after the government announced restrictions, including closures of restaurants, bars and most shops, would continue throughout April.
Italy’s coronavirus pandemic began in late February 2020, and the country was the first in Europe to declare a national lockdown in early March.