COLOMBIA – Employment recovery stalls in 2Q21

The expected activity recovery during 2H21 would aid an employment improvement

Vittorio Peretti & Carolina Monzón


The urban unemployment rate came in at 17.1% in June, falling 7.8pp from last year, (7.9pp down in May), but underwhelmed both the Bloomberg market consensus and our expectation of 16.5%. The national unemployment rate fell 5.4pp to 14.4% in June (-5.7pp to 15.6% in May). Nevertheless, dynamics at the margin show that employment (SA) in 2Q21 retreated 2.1% from 1Q21, likely affected by the social unrest and deadly COVID-19 wave. The unemployment rate rose 0.6pp from 1Q21 to reach 15.1% in 2Q21, despite labor market participation falling 1.1pp from 1Q21. Overall, employment sits 8% below pre-pandemic levels. Going forward, the improvement on the health front during July, easing of mobility restrictions and the postponement of protests will, along with a benign global environment, support activity recovery and an employment improvement during 2H21.

Annual job creation in 2Q21 was driven by a 19.8% YoY increase of private salaried posts (7.5% drop in 1Q21), but failed to offset the 25.5% fall in 2Q last year. Self-employment increased 18.0 YoY (+1.1% in 1Q21; 17.9% down last year). By sector, commerce, construction, and manufacturing activities were the main drivers in the gradual recovery process.

We expect the unemployment rate to average 14% this year, down from 16.1% last year.

Vittorio Peretti 
Carolina Monzón