2025/11/28 | Andrés Pérez M., Vittorio Peretti, Andrea Tellechea & Ignacio Martínez
The unemployment rate reached 8.4% in October quarter (8.5% in Oct-24), a tick below the Bloomberg market consensus was 8.5%, while in line with our call. Employment rose 1.5% YoY (in line with 3Q growth), while the labor force increased 1.3% (1.2% in 3Q).On a seasonally adjusted basis (SA), employment growth was 0.1% MoM/SA, and 0.8% over the last quarter. As a result, the unemployment rate (SA) dropped by 0.5pp since 2Q25 to 8.4%. Labor market informality sits at 26.2%, down 0.9pp over one year. The annual employment change continues to show an offset between positive formal job creation (+180 thousand YoY), lifted by the private sector and self-employment, and a decline in informal posts (-43 thousand YoY). Administrative services, health and transportation were key job creating sectors over twelve months, while construction and public administration retreated.
Our Take: Overall, data over the past several months suggests the labor market adjustment is behind us. Improving non-mining activity and signs of gradually recovering credit demand are likely supporting a moderate recovery in job creation, albeit with labor demand still weak. We expect an average unemployment rate of 8.5% this year (in line with 2024), and consistent with the ceiling of the BCCh’s NAIRU range estimate (7.5-8.5%). Looking ahead, if the business sentiment recovery consolidates, and the investment dynamism spills over to the construction sector amid property purchasing incentive programs and lower average interest rates, employment dynamics should improve. Nevertheless, the Central Bank’s latest Business Perception Report signaled limited appetite from firms to expand payrolls over the next year.
