Unemployment in Chile reaches 8% in August-October rolling quarter

The weakness in the labor market continues in Chile. The unemployment rate reached 8% in the August-October quarter of this year, according to the National Institute of Statistics (INE).

The figure meant a decrease of 0.1 percentage points (pp.) in twelve months, due to the fact that the increase in the labor force (4.8%) was less than that presented by employed persons (4.9%) the state agency said on Tuesday.

“Unemployed people increased 3.4%, affected only by those who were unemployed (4.1%),” he explained in a note. Participation and occupancy rates were 59.8% and 55.0%, growing 2.2 pp. and 2.0 pp., respectively, while the population outside the labor force fell to 4.2%, the INE stated.

UNEMPLOYMENT RATE BY GENDER

On the other hand, the unemployment rate for women stood at 8.6%, increasing 0.5 pp. in twelve months, while the participation and employment rates stood at 49.8% and 45.5%, advancing 2.9 pp. and 2.4 pp., in each case.

For men, the unemployment rate was 7.5%, with a decrease of 0.5 pp., while the participation and employment rates were located at 70.2% and 65.0%, growing 1.4 pp. and 1.7 pp., respectively.

The increase in employed persons was influenced by both women (6.6%) and men (3.7%). According to the INE, the sectors that contributed to the increase were transport (13.3%), mining (26.1%) and households as employers (19.5%), while the occupational categories that had a positive impact were formal wage earners (5.2%), informal wage earners (8.6%) and self-employed workers (3.1%).

On the other hand, the informal employment rate stood at 27.7%, decreasing 0.2 pp. in twelve months. “Informal employed persons increased 3.9%, affected by women (7.3%) and men (1.4%), and by private salaried persons (10.3%) and domestic service personnel (13 3%)”, highlighted the state agency.

JOBS TO RECOVER

A Scotiabank report indicates that there are 194,000 jobs pending to be recovered, where services continue to be the furthest behind. “Meanwhile, commerce stood out for creating 41,000 jobs in the quarter, above the usual seasonality for a month of October, where a large part of them corresponded to self-employment. Excluding the very good performance of this sector, job creation in the rest of the sectors is well below what is observed seasonally”, it said.

Marco Correa, chief economist at BICE Inversiones, said that the Chilean labor market still has room for recovery compared to pre-pandemic levels, a trend that has generally been seen this year, as evidenced by growth in the workforce as well as in employed.

However, economic activity is entering a process of significant slowdown, so the labor market could suffer, especially in sectors such as construction and commerce. “It is probable that in the coming months self-employment will increase and salaried jobs, especially those in the private sector, will stagnate or even decrease. Thus, labor informality should continue to increase,” said Correa.

The economist does not rule out that the unemployment rate may even be seen to rise slightly, but with a greater participation in self-employed and informal jobs, which in “terms of quality for workers are worse, since deterioration is observed in variables such as hours worked, wages and insurance coverage or contributions”.

With information from Bloomberg Línea