- Retail sales leaped 5.5% in November from the year earlier
- Jobless rate falls more than forecast to 6.1% from 6.3%
Chilean retail sales rose at the fastest pace in 21 months as rising employment helped revive consumer demand after almost two years in the doldrums.
Sales leaped 5.5 percent in November from the year earlier, the National Statistics Institute said on its website Wednesday, more than twice as fast as forecast by any of the 14 analysts surveyed by Bloomberg. The jobless rate also fell more than analysts expected, sliding to 6.1 percent in the three months through November from 6.3 percent the month earlier.
The positive economic news may be short lived though, said Antonio Moncado, an economist at Banco de Credito & Inversiones in Santiago. Sales were driven by special offers after stores built up stocks over the past two years of slow turnover, while the jobless rate is likely to rise next year as the construction industry turns down and agriculture lays of workers for seasonal reasons.
“Stores are sacrificing margins by cutting prices in order to boost volume,” Moncado said. At the same time, “the decline in the jobless rate comes within the context of instability that means it is unlikely to be repeated.”
Manufacturing contracted 0.2 percent in November from the year earlier, the third decline in four months, the statistics agency also reported today. Industrial production gained 0.6 percent over the same period.
The world’s largest copper producer has struggled to recover from a slump in the metal’s price with the central bank cutting its growth forecast seven times since March 2013. The latest reduction on Dec. 21 left the growth estimate for next year at 2 percent to 3 percent, compared with the previous prediction of 2.5 percent to 3.5 percent.
Increased government spending and loose monetary policy have had limited success in reviving demand, with gross domestic product expanding about 2.1 percent this year, compared with 1.9 percent last year, the bank said.
While growth is weak, inflation has been above the 2 percent to 4 percent target most of the year, prompting the central bank to raise its key interest rate twice in the past three months to 3.5 percent.