Inflation slows to 5.5% but spending is more expensive


By John

Inflation is slowing down again: in August the price run stopped at +5.5% per year, down from +5.9% in the previous month. The shopping cart is slowing down, but still at much higher levels, recording a +9.6%. The latest Istat data confirm the deceleration phase of inflation in Italy, while in the eurozone it remains stable at 5.3%, with food goods driving the increases. A trend that continues to weigh on the purchasing power and consumption of families is the alarm raised by the associations that ask for interventions to support paychecks and control price lists. Shadows on the labor market: after seven months of growth, employment fell in July compared to the previous month, with the decline of all contracts but especially fixed-term ones. The total unemployment rate rises (to 7.6%, while the youth rate drops to 22.1%) and those who do not have and are not looking for a job are increasing.

Compared to a year earlier, the employment front continues to record positive numbers. A front that from tomorrow 1st September will see the launch of the new platform for the intersection of supply and demand and Support for training and work, the first post-Citizen Income tool. In July, in the last month before the stop for families who benefited from it for seven months in 2023 and do not have disabled members, minors or over 60, families with the Citizenship Income or Pension were just under 1.4 million, with around 564 euros on average. Now the new phase begins: former recipients between 18 and 59 will be able to access the new SFL measure and submit the application directly on the INPS website or through the charitable institutions. After which they will be automatically transferred to the new Siisl platform, allowing them to access training courses and job offers. Meanwhile, the market has to deal with the first monthly decline in employment since the end of 2022: in July it decreased by 73 thousand units compared to the previous month. The number of employed people drops to 23 million 513 thousand, although remaining 362 thousand higher than that of July 2022. The monthly decrease concerns employees (-70 thousand) and self-employed workers (-3 thousand), but only involves the 25-49 year old group. And looking at the type of relationship, fixed-term employees especially decreased (-62 thousand). The decline in inflation was positive. In August, consumer prices for the entire community (NIC), including tobacco, recorded an increase of 0.4% on a monthly basis and 5.5% on an annual basis.

The deceleration is due, among other things, to the slowdown in the prices of unregulated energy goods (to +5.7%), which include fuel, gas and electricity on the free market, of unprocessed foods (+9.2%) and processed (+10.1%). Data which, however, confirms the “stellar” growth, as consumers say, in grocery prices, starting with food and drinks. On food alone, a family with two children spends 777 euros more per year, Assoutenti and Unc calculate, speaking of a drop “by the drop”. Federconsumatori fears the price increases lurking in the autumn. Even for Confesercenti “the process of recovery is still at a slow pace” and the erosion of the purchasing power of families continues, which will lead to “a strong slowdown” in consumption. However, Confcommercio underlines “the comforting signs” on the inflation side and the expectation that it could fall more significantly in October. On the eve of the GDP data for the second quarter of the year, negative data arrives from services: after nine quarters of increases, there was a decline in services turnover (-0.5%) compared to the previous three months. However, the annual variation remains positive for the tenth consecutive quarter (+2.8%), although, underlines Istat, a marked slowdown.