Unemployment in Chile reaches 8% in the July-September mobile quarter

The unemployment rate in Chile reached 8.0% during the July-September mobile quarter, according to the National Employment Survey (ENE) prepared by the Chilean National Statistics Institute (INE).

The figure  meant a decrease of 0.4 percentage points compared to the same period in 2021.

However, INE indicates that “it does not represent a statistically significant variation, as a result of the increase in the labor force (5.5%), lower than that presented by employed persons (6.0%)”.

Unemployed persons increased by 1.0%, registering their first annual expansion, after sustained decreases since the beginning of 2021, “affected by increases in both those who were unemployed (0.7%) and those seeking work for the first time (4.4%)”.

The participation and employment rates stood at 59.7% and 54.9%, growing 2.6 pp. in both cases. On the other hand, the population outside the labor force decreased by 5.1%.

Chile is undergoing economic adjustment as the impact of stimulus measures diminishes after a record 11.7% GDP expansion in 2021.

Trade activity in September fell by 12.3% y/y due to a lower dynamism of retail activity, which fell by 14.3% in twelve months. Meanwhile, manufacturing production recorded a -3.4%.

Chile’s economy could enter a recession.

The Economic Commission for Latin America (ECLAC) estimates that the Chilean economy will grow by 2.2% annually in 2022 and suffer a contraction of 0.9% annually in 2023.

Monetary policy makers raised the interest rate to 11.25% in October and pledged to maintain that level for as long as necessary.

The Central Bank is also expected to release September activity data next week.

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