Chile’s Unemployment Rate Likely moderated in April

The Chilean unemployment rate subsided to 6.1% in March after peaking at 6.7% in August 2014, and Societe Generale expects it to moderate further to 6.0% in April. Most of the reduction came via the decline in labour force growth, while the trends in hiring haven’t changed much over the past three quarters. The developments in the labour market in the context of improving but still sub-trend growth have been quite remarkable. However, there have been lot of data limitations in this regard, and the relative stability of the labour market and the resilience of wage growth have failed to improve consumption meaningfully despite a modest uptick in Q1. A stronger labour market – a pre-condition for stronger consumption growth – will require a significant surge in investment activity. Analysts suspect that the labour market has been improving on the back of significant public spending, and there remain considerable limitations to this strategy in the medium term.

The material has been provided by InstaForex Company –