Chile Unemployment Rate Climbs to 9.5%, a Five-Year High

Chile · LABOUR

The May to July reading is the highest since July 2021, with informality up and formal payrolls shrinking.

The Chile unemployment rate rose to 9.5% in the moving quarter from May to July 2026, the National Statistics Institute said. That is the highest level since July 2021 and 0.8 percentage points above the same window a year earlier.

A five-year high for the Chile unemployment rate

The Instituto Nacional de Estadísticas, Chile’s National Statistics Institute, published the figure on 28 August 2026. Its National Employment Survey covers the rolling three-month window of May, June and July.

The previous reading, for April to June, stood at 9.4%. The new print therefore adds a further tenth of a point to an already weak labour market.

Some 981,044 people were counted as unemployed, an annual rise of 10.4%. The number of people in work fell to 9,314,017, a drop of 16,292 in twelve months.

Eight of Chile’s sixteen regions posted rates at or above 10%. Ñuble led with 11.0%, while Aysén recorded the lowest reading at 4.0%.

The survey is a rotating household panel, not an administrative payroll count. Its moving quarter smooths monthly noise but also delays the turning points.

More job seekers, and fewer jobs

The rise has two engines rather than one. The labour force grew 0.7% over the year while the number of employed people slipped 0.2%.

That combination pushes the Chile unemployment rate up from both sides. Job losses and fresh entrants to the labour market are working together.

First-time job seekers jumped 20.9% year on year. People who had held a job before and then lost it, the cesantes, rose 9.4%.

Juan Bravo of Universidad Diego Portales called it the first annual job destruction since the February to April 2021 window. His reading points to roughly 54,000 formal positions lost and about 38,000 informal ones created.

The distinction matters when reading the headline number. A rate can climb because people lose work, because more people start looking, or both.

Which sectors are shedding work

Information and communications lost the most ground, down 14.6% over the year. Mining fell 6.6%, education 3.3% and manufacturing 2.7%.

Not every branch shrank. Health activities added 3.0% and professional, scientific and technical activities grew 8.8%.

Hours worked also tell a story. Total hours fell 1.8% over the year, with the average working week at 36.4 hours.

The participation rate eased to 61.7%, down 0.1 percentage point. The occupation rate fell more sharply, to 55.9% from 56.4%.

The pattern is uneven rather than broad. Losses cluster in a few branches while health and consultancy services still add workers.

Informality keeps climbing

Informal employment reached 26.5% of all jobs, up 0.5 percentage points in a year. Women were more exposed at 28.3%, against 25.1% for men.

That matters for anyone reading the Chile unemployment rate as a single number. Informal work carries no pension contributions, no health cover and no severance.

Female unemployment stood at 10.3%, up 0.6 percentage points. The male rate rose faster, up 1.0 point to 8.9%.

The institute also publishes a broader gauge combining unemployment and time-related underemployment. That measure sat at 16.0% in the same moving quarter.

Regional gaps remain wide across the country. The Metropolitan Region matched the national figure at 9.5%, up 0.3 percentage points.

What the government said

Daniel Mas, the biministro of Economy and Mining, responded on the day of publication. He said the numbers show a reality the government faces with great seriousness.

His wording was blunt about the shortfall. While so many Chileans are looking for work, he said, the government cannot be satisfied.

Tomás Rau, Minister of Labour and Social Welfare, framed the Chile unemployment rate as a demand on his ministry. Behind every tenth of a point there are people, he said.

Rau said 25,000 hiring subsidies would open the following week through the site subsidioalempleo.cl. Each is worth about half the monthly minimum wage, near CLP 276,000 (US$298).

That conversion uses the Banco Central de Chile dólar observado of CLP 925.25 per US dollar for 28 August 2026. The scheme leans on employers taking on women and young people.

A record half-year for new companies

The government has a brighter number to set beside the jobs data. The Registro de Empresas y Sociedades recorded 120,399 new companies in the first half of 2026.

That is 16,450 more than in the same six months of 2025. The Ministerio de Economía, Fomento y Turismo calls it a record since the registry opened in 2013.

June alone produced 20,458 incorporations, a rise of 15.3% on June 2025. Simplified joint-stock firms, known as sociedades por acciones or SpA, made up 80.6% of the total.

Figures circulating at around 140,000 for the half year do not match the official release. The verified total for January to June is 120,399, announced on 27 July 2026.

New registrations are not the same as payrolls. A company formed on a digital platform may never hire a single employee.

Most of the new entities are micro-firms with one or two owners. They lift the count of taxpayers well before they lift salaried employment.

Kast’s first months and the wider picture

President José Antonio Kast took office on 11 March 2026, so this is his fifth full month. Analysts note the jobless rate has stayed above 8% for 43 consecutive months, spanning two governments.

The Banco Central de Chile held its policy rate at 4.5% on 28 July 2026. Its statement noted a rising jobless rate alongside persistently weak job creation.

In its June report the bank cut its 2026 growth range to between 1.0% and 1.75%. It had previously projected 1.5% to 2.5% for the year.

Kast has said he expects hiring to improve in the final quarter of 2026. His government targets a Chile unemployment rate of 6.5% by the end of its term.

Kast has pointed to construction as the sector he expects to lead a recovery. He has cited housing stock sales and faster environmental permits as the triggers.

For investors and expats the signal is a soft labour market rather than a collapse. Formal payrolls are shrinking while informal work and new company registrations both rise.

Frequently Asked Questions

Sources

• www.ine.gob.cl
• www.economia.gob.cl
• www.latercera.com
• radio.uchile.cl
• www.elmostrador.cl
• www.emol.com
• www.bcentral.cl
• www.bcentral.cl
• www.sii.cl
• www.biobiochile.cl

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