Chile's July Unemployment Rate Unexpectedly Declines on Economic Recovery

Chile’s unemployment rate unexpectedly fell in the three months through July, the National Statistics Institute said.

Unemployment slid to 8.3 percent, the Institute said today in Santiago. The median forecast of 12 economists surveyed by Bloomberg was for the rate to be unchanged from the three months through June at 8.5 percent.

Chile’s unemployment rate has declined from 11.6 percent last August and 10 percent at year end. The rate normally increases in Chile’s winter months of June through August as farms sheds jobs, the institute said in a July 30 report.

The unemployment rate has remained below 9 percent over the last four months in part because of a “dynamic” retail industry, which accounts for 20 percent of employment, Juan Pablo Castro, an economist at Banco Santander SA in Santiago, said in an Aug. 30 interview. Retail sales rose 19 percent in July from the previous year and 18 percent in June, the institute reported.

The financial services industry also has boosted hiring, said Castro, who estimated unemployment through July would increase to 8.6 percent. The rate could close the year at 7 percent to 7.5 percent as construction jobs increase, he said.

“The construction sector still has not shown clear signs of recovery,” the institute said in an Aug. 30 report. “A process of reactivation is expected to start in coming quarters.”

Chile’s peso depreciated 0.5 percent to 502.90 per dollar at 9:15 a.m. New York time from 500.48 yesterday.

To contact the reporters on this story: Randy Woods in Santiago at rwoods13@bloomberg.net; or Sebastian Boyd in Santiago at sboyd9@bloomberg.net

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