The urban unemployment rate surprised to the upside. The national unemployment rate reached 9.1%, down by 0.1pp over one year, and below BanRep’s NAIRU estimate of 10.7%. The urban unemployment rate increased to 9.5% in October, up by 0.5pp from October 2023, above the Bloomberg market consensus of 8.9% and our 9.0% call. Employment increased 1.3% yoy in October (+0.5% in September), while the labor force rose 1.2% yoy (+0.3% in previously). The participation rate dropped a mild 0.1pp from October 2023 to 63.9%. Sequentially, employment remained broadly stable from September, while the unemployment rate (SA) rose by 0.1pp from the previous month to 10%.
Private salaried posts remain a key employment driver. In the quarter ending October, employment increased 1.0% yoy (+0.6% in 3Q24), supported by private salaried post (2.6% yoy; +2.1% in 3Q24). On the other hand, public sector jobs fell by 6.1% yoy (-5.2% in 3Q24). Manufacturing, commerce, construction and entertainment were key job drivers on an annual basis. Nevertheless, the monthly print was partially offset by communications, hotels and restaurants and public administration sectors.
Our take: Some sectors such as manufacturing, commerce and construction are showing a more favorable dynamics, in line with a gradual recovery of activity. In December, the focus will be on the discussion of next year's minimum wage increase.
