Argentina’s Jobless Rate Climbs to 7.5% Despite GDP Growth

Argentina unemployment rose sharply to close 2025, with the jobless rate hitting 7.5% in the fourth quarter — the highest year-end reading in four years and a clear signal that President Javier Milei’s economic recovery is bypassing large segments of the workforce. The Rio Times, the Latin American financial news outlet, reports that the data released Wednesday by statistics agency INDEC showed 1.1 percentage points of deterioration compared to the same period in 2024.

The survey, covering 31 urban areas and a population of roughly 30 million, found approximately 1.7 million people actively searching for work across the country. Employment fell by 142,600 positions in the quarter alone, even as the labor force grew by 69,300 people — a combination that pushed joblessness to levels not seen since early 2021.

Argentina Unemployment Hits Young Workers Hardest

The damage fell disproportionately on younger Argentines. Among men under 29, the jobless rate jumped 4.5 percentage points year-on-year, while women in the same age group saw a 4.1-point surge. Both groups now face unemployment rates above 16% — roughly double the national average.

Workers between 30 and 64, by contrast, showed stable employment indicators. The generational divide suggests that Milei’s austerity program and labor market deregulation have created opportunities primarily in sectors that favor experienced workers, while entry-level positions continue to disappear.

Geographically, Greater Buenos Aires recorded the worst conditions at 8.6% unemployment, followed by the Pampas region at 7.7%. Cities including La Plata, Mar del Plata, and Río Gallegos all reached 9.5%. At the other end, the Northwest posted just 4.2% and Patagonia 4.8%.

GDP Growth Without Job Creation

The most striking finding may be the disconnect between growth and jobs. Economists at Banco Provincia flagged that 2025 was the first year in which Argentina’s GDP expanded while unemployment simultaneously rose — a phenomenon they attributed to growth concentrated in capital-intensive sectors like mining, energy, and financial services rather than labor-heavy industries.

Falling purchasing power also played a role. As real wages lagged inflation through much of 2025, more household members entered the job market to make ends meet — expanding the labor force faster than the economy could absorb them. The employment rate slipped to 45%, down 0.7 points from a year earlier.

Formal employment bore the brunt. INDEC data showed the formal employment rate dropped 0.8 percentage points year-on-year, while informal work held steady. With 43% of Argentine workers still in the informal economy, the shift raises questions about the quality of whatever jobs the recovery has produced.

Milei’s Reform Gamble Faces Its Toughest Test

The figures land at a sensitive moment for Milei’s economic project. His administration slashed roughly 50,000 public sector positions while cutting subsidies and deregulating markets — moves that tamed inflation from 211% in 2023 to around 32% annually but left many workers stranded in the transition.

Milei’s supporters argue the pain is temporary, pointing to a midterm election victory in October 2025 and a $20 billion IMF deal as proof that the strategy is working. Critics counter that jobless growth is not growth at all — and that an economy adding GDP while shedding formal employment is storing up social pressure rather than releasing it.

The coming quarters will test whether Argentina’s recovery can finally broaden beyond finance and commodities into the construction, manufacturing, and service sectors that employ the most people. Until then, the 7.5% headline number tells a story Milei’s economic team would prefer to rewrite: a country growing richer on paper while 1.7 million of its citizens still cannot find work.