Bloomberg News

Chilean Jobless Rate Was Higher-Than-Forecast 6.6% in Oct.

November 30, 2012

Chile’s unemployment rate rose for the second straight month in October, surprising analysts as the labor market failed to create jobs fast enough to accommodate a growing work force.

Unemployment was 6.6 percent in the three months through October, compared with the median estimate of 14 economists surveyed by Bloomberg for 6.4 percent. Unemployment rose from 6.5 percent in the three months through September and declined from 7.2 percent in the year-ago period, the National Statistics Institute said in a report today.

More than 32,000 people entered the labor force in October as hiring increased in mining and construction. The increase in unemployment was only “marginal” as 25,000 new jobs were created, Felipe Jaque, an economist at BBVA Research, said by phone from Santiago.

“This continues to be good news and the unemployment rate is relatively low,” he said. “The labor market is pretty tight, and industries continue to compete for workers. Internal risks of increased vigor in the economy still weigh more than external threats than a few months ago.”

The central bank board has kept is key interest rate unchanged at 5 percent for 10 straight months as policy makers balance the risks of the global slowdown and sustained growth at home.

Two-year interest rate swaps, which reflect traders’ views of average borrowing costs, increased 19 basis points, or 0.19 percentage point, to 5.19 percent at 8:59 a.m. local time today from Nov. 13 when policy makers last met.

Gross domestic product in the world’s top copper producer is on track to increase 5.1 percent in 2012, more than doubling the global average, according to forecasts made by economists surveyed by Bloomberg.

GDP increased 5.7 percent in the third quarter from last year, exceeding analyst estimates as private consumption expanded 6.4 percent and investment surged 13 percent.

“Today there are high risks, both locally and abroad, which could call for policy responses in opposite directions,” Joaquin Vial, the newest member of the board, said in a presentation posted on the bank website today. “Therefore, monetary policy must be prudent.

To contact the reporters on this story: Randall Woods in Santiago at rwoods13@bloomberg.net; Matt Craze in Santiago at mcraze@bloomberg.net

To contact the editor responsible for this story: Joshua Goodman at jgoodman19@bloomberg.net


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