* Jobless rate stable at October record of 11.1 pct
* Youth unemployment hits 37.1 pct, highest on record
* Rising unemployment is key issue ahead of February
(Recasts lead, adds political comment, graphics)
By Gavin Jones
ROME, Jan 8 (Reuters) - Youth unemployment in Italy rose to
an all time high above 37 percent in November, data showed on
Tuesday, piling pressure on outgoing Prime Minister Mario Monti
who is seeking a second term at national elections in February.
Italy has been in a deep recession since the middle of 2011
and joblessness has risen steadily as businesses clamp down on
staffing levels to cope with crumbling domestic demand.
The plight of the unemployed, particularly among the young,
will be a crunch issue at the election and Monti, who heads a
centrist group, is criticised by opponents on the left and right
for hurting the economy in his efforts to fix public finances.
Headline unemployment was stable in November at October's
record high of 11.1 percent, statistics institute ISTAT
reported. Joblessness rose above 11 percent in October for the
first time since 1999.
November's rate was marginally below a forecast of a further
rise to 11.2 percent in a Reuters survey of analysts, but it was
up 1.8 percentage points from November 2011 when Monti was
appointed to save Italy from a mounting debt crisis.
The youth unemployment rate, referring to 15-24 year-olds,
jumped for the third month running to 37.1 percent, its highest
level since records began in 1992.
Companies are reluctant to give new recruits regular
contracts because strong job protection means it is hard to fire
them. So young people tend to move from one temporary contract
to the next, and opportunities have dried up in the recession.
Monti sought to address the problem with a hotly contested
labour reform passed last summer, but critics say that by making
it more costly and complicated for firms to offer temporary
contracts, the reform discouraged hiring in the recession.
"You always hope that if you put some effort in you will get
something back," said 22-year-old Michele Andaloro as he lined
up in search of work at one of Rome's largest job centres.
"The next government needs to work for the future of young
people and not behave like in the past."
Most recent polls give Monti's centrist alliance around 15
percent of the vote, lagging the centre-right led by former
Prime Minister Silvio Berlusconi at about 28 percent, and well
behind Pier Luigi Bersani's centre-left at around 39 percent.
Opponents lost no time in attacking Monti over the latest
"Youth unemployment at 37.1 percent is a terrible figure
which highlights the failure of the Monti government," said
Maurizio Gasparri of Berlusconi's People of Freedom party.
The left-wing CGIL union, which fought Monti's labour
reform, said the data marked the failure of his austerity
policies "which worsened the recession and inequality and have
mainly hurt the young generations."
Analysts say the growing financial difficulties of families
are also forcing more young people to look for work rather than
study or live off family income.
In a dismal series of records, the employment rate edged
down in November to a 12-month low of 56.8 percent, while the
male employment rate fell to 66.3 percent, the lowest since
records began in 1992.
"The worst hit by the crisis are those in the industrial
section and construction," an ISTAT spokeswoman said.
Italian industrial output is still more than 25 percent
lower than its level of mid-2008, before the recession brought
on by the global financial crisis.
Analysts say the real challenge for Italy is to increase its
chronically low rates of employment and participation in the
labour market, which are among the lowest in the industrialized
world, especially among women, the young and the elderly.
(Additional reporting by Cristiano Corvino; Editing by