The unemployment rate fell sequentially, while employment increased at the margin. The national unemployment rate fell to 8.2%, below by 0.8pp over one year. The urban unemployment rate declined to 8.0% in November, down by 0.6pp from November 2023, well below the Bloomberg market consensus of 9.8% and our 9.3% call. Employment increased 1.8% yoy in November (+1.3% in October), while the labor force rose 0.9% yoy (+1.2% yoy previously). The participation rate dropped 0.4pp from November 2023 to 63.7%. Sequentially, employment rose from October 0.7% (+0.1% previously), while the unemployment rate (SA) dropped by 0.5pp from the previous month to 9.5%, and the urban unemployment rate dropped by 0.8pp to 9.6%, below BanRep’s NAIRU estimate of 10.7%.
Private salaried posts continued to be the main job creator. In the quarter ending November, employment increased 1.2% yoy (+0.6% in the 3Q24), supported by private salaried post (+2.9% yoy; +2.1% in the 3Q24). On the other hand, public sector jobs fell 1.2% yoy (-5.2% in 3Q24). Manufacturing, hotels and restaurants and commerce were key job drivers on an annual basis. However, the favorable labor market dynamics were partially countered by financial and insurance activities, communications and construction.
Our Take: We expect the unemployment rate to average 10.3% this year, broadly stable from the 10.2% 2023 average (11.2% in 2022), but with a downside bias given better than expected dynamics this month. Once again, key sectors continue to show more favorable dynamics, such as manufacturing and hotels and restaurants, but this was partially countered by a deterioration in the dynamics of the construction sector.
