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Employment softened at the margin

Vittorio Peretti & Carolina Monzón


The unemployment rate remained below double digits, but employment continued to soften at the margin.The national unemployment rate of 9.5% was 2.0pp down over one year, while the urban unemployment rate reached 9.1%, down 3.1pp from last year, and below the Bloomberg market consensus and our call of 9.7%. Total employment expanded 5.7% YoY in November (7.2% previously), while the participation rate rose 1.2pp from November last year to 63.4% (yet still 1.6pp below the rate in 2019). At the margin, total employment contracted 0.1% MoM/SA from October, building on the previous drop of 1.1%. Nevertheless, total employment remains elevated, sitting 3.1% above pre-pandemic levels.

Job growth remains private sector led.In the quarter ending in November, employment increased 7.1% yoy (8.0% in 3Q and 10.6% in 2Q22), pulled up by private salaried posts (13.9% yoy; 14.1 in 3Q22) while government employment fell 10.9% yoy (6.4% drop in 3Q) and self-employment was broadly stable (+2.7% in 3Q).

We expect the average unemployment rate to reach 11.2% this year (13.8% in 2021; 10.9% in 2019).Looking ahead, labor demand is likely to cool due to rising interest rates and the implementation of another large minimum wage increase.

Vittorio Peretti

Carolina Monzón