The unemployment rate was broadly in line with expectations, but sequential employment dynamics show a stabilization of employment levels. The unemployment rate reached 11.7% in February, up 0.3pp over one year. Meanwhile, the urban unemployment rate came in at 11.6% (a 0.1pp rise over one year), slightly above the Bloomberg market consensus of 11.5% and our 11.1% call. Employment expanded by 1.2 yoy (2.5% in January), while the labor force rose by 1.5% (+1.3% previously). The participation rate remained stable from February last year at 63.8%. Sequentially, total employment fell by 0.5% MoM/SA from January (+0.9% previously).
Private salaried and public sector jobs drove employment growth. In the quarter ending February, employment increased 1.8% yoy (2.3% in 4Q23), supported by private salaried posts (2.6% yoy; 3.2% in 4Q23) and public sector jobs that increased 2.6% yoy (-0.8% in 4Q23). Meanwhile, self-employment increased 0.4% (+2.5% in 4Q23). Real estate activities, hotels and restaurants and transportation were key job drivers over twelve months.
We expect the unemployment rate to average 10.6% this year, rising from the 10.2% average last year (11.2% in 2022). Amid a contractionary monetary policy and still elevated inflation, activity is projected to remain weak this year, in line with a gradual loosening of the labor market.
