Fynsa
Recent local employment data incorporates some interesting information. We know that the labor market has been weakening recently, which has had an impact on consumption, but monitoring the speed at which it continues to weaken and the level it will reach is a major concern in projecting what will happen to activity around 2023.. So we wanted to summarize our readings in a very original way that has never been done before: the good, the bad and the ugly.
The good news: The unemployment rate remained at 8.0%, after consistently worsening over the past few months. In fact, to two decimal places, it decreased. This was the result of the creation of 26 thousand new jobs (0.3% m/m), which exceeded the increase in the labor force of 21 thousand people (0.2% m/m). By category, the increase in employed persons came mainly from private employees (0.3% m/m), followed by self-employment (0.8% m/m), which was partially offset by a drop in public employees (-0.3% m/m).
The downside: the rolling quarter ending in October is, historically, one that features positive seasonality. This means that, for various reasons that recur over the years (think Christmas and trade, or harvest and agriculture), this month usually creates more employment than the rest. However, this did not happen, causing the seasonally adjusted unemployment rate to rise from 7.7% to 7.9%.. This weak creation of new jobs has led us to have a deficit of more than 400 thousand positions (440 thousand, to be exact) with respect to what we should have had if we had recovered all the jobs lost in the post social outbreak and pandemic period.
The ugly part: the figures in general show a labor market that continues to slow down, beyond what some authorities want to express. Not only when looking at these numbers, but adding them to what is happening with salaries or job advertisements, which continue to decrease. In other words, not only are fewer jobs being created, but the available jobs are being sought by more and more candidates, whose effect on salaries is evident.. In addition, certain sectors show more weakness than others, especially those employing lower-skilled labor, such as, for example, construction.
The labor market is one of particular importance in economics, because of its direct effects on the income and welfare of most families. This is especially true in Chile, where the vast majority only rely on their work as a source of income. Without promoting policies that encourage investment, allowing for sustainable economic growth going forward, we are unlikely to see a change in this trend.
