Colombia’s Job Boom Hit a 25-Year Low in Unemployment, but 2026 Tests It

Key Points

• Unemployment averaged 8.9% in 2025, the lowest annual rate since comparable records began in 2001.
• December tightened further: unemployment fell to 8.0%, with 24.224 million people employed, up 603,000 in a year.
• Higher formal hiring costs could revive informality, which still covered 55.5% of workers in December.

Colombia closed 2025 with an unemployment rate that surprised many forecasters. The annual average was 8.9%, the best result since the current series began in 2001.

The year ended stronger. In December, unemployment was 8.0% nationwide and 7.8% in the 13 largest metro areas. The headcount shows why the number matters.

December employment reached 24.224 million people. The number of unemployed Colombians fell by 272,000 versus a year earlier.

Job creation leaned toward payroll work. “Private employee” positions rose by 920,000. Self-employment fell by 499,000, a shift that often signals greater stability.

Sector gains were concentrated. Manufacturing added 510,000 jobs in December. Public administration, defense, education, and health added 121,000.

Arts and other services added 114,000. Agriculture lost 42,000, underscoring how rural work remains fragile. A tighter market changes bargaining power.

The central bank frames this as a vacancy-and-mismatch problem. Companies advertise roles but struggle to match candidates. Firms then bid up wages, and higher costs can spill into consumer prices.

The gains are uneven. Women’s unemployment was 10.1% in December, versus 6.4% for men. Still, the 3.7-point gap was the smallest on record.

Youth unemployment for October to December was 14.2%. Geography can be brutal. Quibdó posted 23.1% overall unemployment and 31.5% for youth. Bogotá stood at 6.5% overall and 11.1% for youth.

The real question is 2026. The minimum wage was set at COP 1,750,905 ($466). Transport support adds COP 249,095 ($66). Together, that is COP 2,000,000 ($532) for eligible workers.

Labor rules that raise premiums and surcharges add pressure. Employer costs could rise by roughly 6.8% to 35%, depending on schedules. If costs jump faster than productivity, firms may hire informally or not at all.

Related coverage: Brazil’s Morning Call | Colombia’s Oil Export Slide Exposes A Growing Vulnerability This is part of The Rio Times’ daily coverage of Colombia affairs and Latin American financial news.

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