Chile's Unemployment Rate Drops to 8.5% Amid Public Sector Job Surge

Chile's unemployment rate has fallen to 8.5% for the period from February to April 2024, driven by significant job creation in the public sector and growth in key economic sectors like commerce, administration, and transportation.

Why this matters: A decrease in unemployment rate can have a significant impact on the overall economy and citizens' standard of living. This drop in unemployment rate could lead to increased consumer spending, economic growth, and improved social stability.

According to Chile's National Institute of Statistics (INE), the public sector added 42,000 new jobs, which played a key role in reducing the unemployment rate. The number of job offers increased, but at a slower rate than the growth in the employed population.

The unemployment rate among women remained steady at 9.5%, while the rate among men was 7.8%. This gender disparity highlights ongoing challenges in achieving equitable employment opportunities.

Chile's economic performance in the first quarter of 2024 was strong, with a 2.3% growth in gross domestic product (GDP), according to the country's Central Bank. This growth was driven by improved investment performance and a 2 percentage point increase in domestic demand.

Despite the positive employment news, Chile's economic activity showed signs of slowing down in the second quarter. The Imacec index, a proxy for GDP, fell 0.3% in April from the previous month, less than the 0.6% median forecast. Mining activity dropped by 2.4%, and commerce declined by 1.4%.

Finance Minister Mario Marcel commented on the economic situation, stating, "The economy is in a period of expansion," and noted that higher copper prices are expected to positively impact the current account balance and fiscal revenue.

Felipe Hernandez, a Latin America economist at Bloomberg Economics, observed that "April data show Chilean activity and domestic demand have lost momentum in the second quarter after a sharp increase in 1Q."

The Chilean government raised its 2024 economic growth forecast to 2.7% from 2.5% in May, citing stronger-than-expected activity across sectors at the start of the year and higher copper prices.

Chile's unemployment rate has decreased to 8.5%, supported by significant job creation in the public sector and growth in commerce, administration, and transportation. While the economy shows signs of slowing, the outlook remains positive with anticipated benefits from higher copper prices and increased domestic demand.

Key Takeaways

• Chile's unemployment rate falls to 8.5% (Feb-Apr 2024) driven by public sector job creation.
• Public sector adds 42,000 new jobs, contributing to the unemployment rate drop.
• Gender disparity persists, with 9.5% unemployment rate among women and 7.8% among men.
• Chile's economy grows 2.3% in Q1 2024, driven by investment and domestic demand.
• Government raises 2024 economic growth forecast to 2.7% due to stronger-than-expected activity.