Chile’s Jobless Rate Rises to Highest in Almost Five Yearsby
Jobless rate reached 6.8% in the three months through May
Retail sales edged up 0.6% in May from the year earlier
Chile’s unemployment rate rose to the highest in almost five years in the three months through May, as industrial production stalled and retail sales growth eased.
The jobless rate climbed more-than-expected to 6.8 percent from 6.4 percent in the month earlier period and from 6.6 percent the year before, the statistics agency said on its website Thursday. A Bloomberg survey of 18 analysts had forecast a rate of 6.7 percent. Industrial production slid 2 percent over the same period, while retail sales edged up 0.6 percent, the slowest pace since March of last year.
Chile is enduring its third year of sluggish economic growth as the end of a 10-year commodity boom undermines investment in South America’s wealthiest economy. After months of showing resilience to the slowdown, the labor market has started to deteriorate and higher unemployment is threatening to damp consumer spending, adding to the country’s economic woes. As the labor market weakened, almost the only jobs created over the past year were in self-employment.
“What surprised us the most is that salaried employment barely went up," said BBVA senior economist Cristobal Gamboni. “At the same time, self-employment increased, which means that people are looking for any jobs they can do. Both figures are signs of weakness.”
The number of people with salaried work rose 0.4 percent in the year through May, while the self-employed increased 6.5 percent, according to the statistics agency.
The downturn in the labor market is beginning to impact on the retail industry, Gamboni said.
According to the separate report by the National Chamber of Commerce this week, retail sales in Santiago fell 4.1 percent in May compared with the year before, the biggest decline since September 2014, even though May last year had two bank holidays when many stores were closed.
"Even the extra business days could not turn spending figures around," said Gamboni. "Labor market weakness is starting to be reflected in the retail industry."