Itaú BBA - CHILE – Employment growth accelerates at the start of the year

Macro Latam

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CHILE – Employment growth accelerates at the start of the year

abril 30, 2019

In an environment of low inflation and expansionary monetary policy, we expect employment to improve gradually

In the first quarter of 2019, the unemployment rate was stable over twelve months at 6.9%, in line with the Bloomberg market consensus (Itaú: 7.0%). Employment growth increased to 1.2% yoy (0.7% in 4Q18), the highest rate since 2Q18, while the labor force grew at a stable 1.1%. On a negative note, participation fell for the third consecutive quarter with a 0.4pp annual drop (similar to 4Q18). Meanwhile, salaried jobs creation remains a key driver, but stronger self-employment led the employment acceleration in the quarter. Complementary sources of information (capturing formal employment) that the central bank monitors show solid gains in formal employment.

Job growth in the quarter was boosted by self-employment and salaried public posts. Total salaried job creation increased 1.1% yoy (1.3% in 1Q18), lifted by the 4.1% yoy growth of public posts (3.2% in 4Q18), while private payrolls slowed to 0.5% yoy (+0.9% in 4Q18). Official salaried job creation remains below the evolution of pension fund contributors, which grew 3.7% yoy in the quarter ending in February (3.9% for the 4Q18, 3.4% in 3Q18). Meanwhile, self-employment accelerated to 3.2% yoy, following the 1.3% drop in 4Q18.

In an environment of low inflation and expansionary monetary policy, we expect employment to improve gradually, consistent with a slow narrowing of the output gap. 

 

Miguel Ricaurte
Vittorio Peretti



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