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Private salaried job pull increases.
2024/03/28 | Andrés Pérez M., Vittorio Peretti & Ignacio Martinez Labra

The unemployment rate for the quarter ending in February came in at 8.5%, in line with our call, yet slightly below the Bloomberg market consensus of 8.6%. The unemployment rate implies a 0.1pp increase over one-year despite the participation rate increasing 1.4pp (to 62.3%, the highest since March 2023). The annual increase is below the +0.4pp registered in January, and the +0.9pp during 2H23. At the margin, employment grew 0.4% MoM/SA, the sixth consecutive increase, while the labor force rose 0.2%. The seasonally adjusted unemployment rate fell for the third consecutive month to 8.6% (from a cycle peak of 9% in the November quarter). The survey data continues to suggest that the bulk of the labor market adjustment has already unfolded, although complementary information such as weak job openings and high firm layoffs add a layer of doubt.


Annual job gains were widespread, supported by formal private salaried job dynamics. Overall employment rose 3.1%yoy, up from 2.9% in 4Q23. Total salaried posts increased 3.3% YoY during the quarter (2.7% in 4Q), as public salaried jobs fell 0.2% (+7.2% in 4Q), but the private category rose 4.1% (1.8% in 4Q). Self-employment increased by 3.0% (6.1% in 4Q). In terms of economic sectors, job growth was lifted by commerce, healthcare, and education, while construction and real estate concentrated job losses (sustaining the view of weak investment in the sector). Overall, formal employment increased 3.0% YoY (2.6% in 4Q), while informal jobs rose 3.3% YoY (3.5% in 4Q). The informality rate increased to 27.4% (28.3% average during 2018-19), rising 0.1pp over one year.


We expect the unemployment rate to average 8.6% this year, down 0.1pp from 2023. Improving sequential job creation dynamics, along with nominal wage growth that has averaged 7.5% yoy in the last quarter pose upside risks to service inflation dynamics ahead (building on the risks from CLP pass-through to tradable prices). In conjunction with the large upside CPI surprises at the start of the year, we expect the central bank will lower the size of rate cuts to 75bps next week, taking the policy rate to 6.5%.