According to the National Statistics Office labor market survey, Chile’s national unemployment fell to 8.2% in the quarter ending in November, down from 8.7% in the same period of 2023. The print was below our call (8.5%) and the Bloomberg median (8.4%). The annual decline in the unemployment rate was driven by a 1.6% increase in employment, which was above the 1.0% increase in labor force participation.
On a seasonally adjusted basis, the unemployment rate fell to 8.4%, from 8.5% in the previous month, falling further from the annual peak of 8.7% in the quarter ending in August.
Our take: Looking past the surprise. Regardless of the lower-than-expected unemployment rate for the quarter ending in November, we maintain our view of persistent slack in the labor market. In fact, looking at the survey’s details, INE’s data showed that employment creation (SA) was flat at the margin, after falling by (-0.05% in the previous month). Separately, data from the Pensions Superintendence showed that unemployment insurance beneficiaries continued to rise at a double-digit annual pace in October (18.8%). Labor demand proxies continue to remain below pre-pandemic levels. In this context, we expect the BCCh to maintain a cautious guidance – including a pause in January – towards the ceiling of the neutral range estimate of 4.5% by June 2025.