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Public sector boosts job growth.

During the quarter ending in February employment increased 0.4% MoM/SA, the third sequential monthly gain, but a swifter rise in the labor force is increasing the unemployment rate. Over twelve months, employment increased 3% YoY (3.4% in January), lifted by salaried posts. The labor force grew 4% YoY (4.1% in January), leading to an unemployment rate of 8.4% (+90bps over one year; +80bps in January) and significantly higher than market consensus and our call of 8.1%. Employment sits 0.5% below pre-pandemic levels (SA) while the labor force participation rate rose to 60.9% (from 60.6%), as it edges back to the 63% pre-Covid level.

The employment increase over twelve months continues to be pulled by formal jobs, lifted by health, lodging and food services.
The 3.0% YoY employment increase (3.3% in 4Q) was lifted by public salaried posts (7.8% YoY; in line with the acceleration of fiscal expenditure seen in recent months), while private salaried jobs rose a milder 1.9% YoY (6.0% in 4Q22). Self-employment rose 2.6% YoY (recovering from the 2.3% fall in 4Q22). Formal employment increased 3.7% YoY (4.6% in 4Q), while informal jobs grew 1.1% YoY (null variation in 4Q). The informality rate sits at 27.3% (roughly stable).

The gradual deterioration of the labor market is unfolding.
The recovery of the labor force should continue as household savings fall. In turn, a cooling economy, with online job postings falling well below pre-covid levels. We expect the unemployment rate to continue to increase throughout the course of the year, averaging 8.8% this year (7.9% in 2022).


Andrés Pérez M.

Vittorio Peretti 

Ignacio Martinez Labra