Itaú BBA - CHILE - Job growth accelerates, but risks ahead

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CHILE - Job growth accelerates, but risks ahead

mayo 31, 2019

As headwinds pick up, it is unlikely the unemployment rate would narrow significantly from the 7% recorded last year

The labor market showed mixed signals in the quarter ended in April. While the unemployment rate came in a tick above expectations at 6.9% and 0.2pp above the rate 12 months earlier, job creation accelerated, lifted by salaried and self-employment. Despite the labor force growth picking up 0.4pp to 1.5%, participation continued to fall from last year (-0.2pp to 59.6%), showing the labor market recovery is coming with a lag. Complementary labor data (pension contributions) is consistent with the favorable evolvement of salaried job posts that, along with recovering wage growth, could shield consumption ahead.

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The creation of jobs grew at the fastest pace since July 2018. Health services, education, public administration, construction and mining drove the 1.4% yoy rise (1.2% in 1Q19 and 0.7% in 4Q18). Meanwhile, in line with the weak primary sector performance, agriculture and fishing shed jobs in the month, along with commerce. Employment growth was lifted by the 4.9% yoy growth of public posts (3.2% in 4Q18), while private payrolls slowed to 0.1% yoy (0.9% in 4Q18). Meanwhile, self-employment grew 2.0% yoy (-1.3% in 4Q18).

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As headwinds to Chile’s economic outlook pick up, it is unlikely the unemployment rate would narrow significantly from the 7% recorded last year.
 

Miguel Ricaurte
Vittorio Peretti



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