Italy's unemployment rate rose to a record high level in May, official data showed on Monday in a grim message for Prime Minister Enrico Letta's government which is struggling to boost growth.
Economy Minister Fabrizio Saccomanni announced this weekend that the government will have to resume public spending cuts if it is to stimulate the eurozone's third-biggest economy.
He said the funds raised would be used for tax cuts to aid companies, but warned that such a move would likely "raise protests" in the recession-hit country.
The new unemployment data highlights this social dimension.
The unemployment rate, according to initial data from the National Institute of Statistics (ISTAT), rose to 12.2 percent of the workforce, an increase of 0.2 points from the April level and 1.8 percentage points higher over 12 months.
The jobless rate stuck above 10 percent for a 16th month running and was the highest recorded since ISTAT began collecting the data in 1977.
Italy's business lobby Confindustria said in a report last week that gross domestic product would shrink 1.9 percent in 2013, compared to a previous forecast of a 1.1 percent decline.
It said Italy would begin recovering in the last quarter of 2013 and see a return to growth in 2014, but warned that progress would be "very slow" and cut the growth estimate for next year from 0.6 percent to 0.5 percent.
There was a glimmer of good hope on the youth jobless front however: the rate among unemployed 15-24 year olds slowed slightly to 38.5 percent, 1.3 percent less than in April, meaning just over one in 10 young Italians are seeking work, ISTAT said.
On Wednesday, the government unveiled new emergency measures to tackle the country's spiralling youth unemployment -- which is currently among the highest in Europe -- including training measures as well as tax incentives for companies who hire youths aged 18 and 29.
Data published in Brussels on Monday signalled however, that the outlook for Italian manufacturing may be firming.
The data, part of eurozone-wide survey on sentiment among purchasing managers in the manufacturing sector, is considered a reliable indicator of activity to come.
Unemployment data is mainly a lagging indicator of how companies have reacted to past trading conditions.