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Unemployment rate remains low.
31/05/2023 | Vittorio Peretti & Carolina Monzón

Employment fell sequentially for the first time since November as an expected labor market loosening may be materializing. The urban unemployment rate reached 11.1% in April (stable with the previous year), above the Bloomberg market consensus of 10.5%, while closer to our 10.8% call. The national unemployment rate sits at 10.7%, 0.4pp down over one year (narrowing from the 1.5pp annual correction recorded during 1Q23). Total employment expanded 3.6% yoy in April (5.1% previously), while the labor force rose 3.1% (2.7% in March). Overall, the participation rate increased 1.0pp from April last year to 64.6% (and 0.4pp above April 2019). At the margin, total employment contracted 0.3% MoM/SA from March, pulled down by urban job destruction (0.9% Mom/SA). While the monthly data shows an unemployment rate uptick in April (+70bps to 10.6%), prior employment outperformance means the quarterly print continues to trend down. With a labor market yet to exhibit clear signs of loosening, and core inflationary pressures high, it is unlikely the Board will lower rates this year.


Self-employment and public job creation accelerates. In the quarter ending April, employment increased 3.8% yoy, in line with the 1Q23 increase. The private salaried pull eased to 3.4% yoy (from 6.2% in 1Q), while self-employment increased to 3.8% yoy (2.0% in 1Q) and public sector jobs rose 5.5% yoy (0.1% drop in 1Q). 


We expect an average unemployment rate of 11.5% this year (11.2% in 2022; 10.9% in 2019).