Chilean unemployment unexpectedly fell in the three months through October, the first month of a quarter that Finance Minister Alberto Arenas forecasts will see a “small and moderate reactivation” in the economy.
The jobless rate slid to 6.4 percent from 6.6 percent in the month earlier period, the National Statistics Institute said on its website today, compared with the 6.7 percent median forecast of 17 economists polled by Bloomberg.
Retail sales fell 0.2 percent in October from the year earlier, while manufacturing output gained 1 percent, the institute said in a separate report. Policy makers have cut interest rates by more than any other country in the past 14 months as the economy grows at the slowest pace since the 2009 recession.
While Arenas forecasts the beginning of a pick-up this quarter, central bank director Enrique Marshall told El Mercurio over the weekend that growth would remain weak into the first few months of next year.
“The report provides a certain pause in the expectations for a deterioration in the labor market and provides signs of resilience,” Felipe Ruiz, an economist at BCI in Santiago, said in an e-mailed note. “Higher unemployment may take longer than initially expected.”
The jobless rate is up from 5.8 percent in the year-earlier period, with the number of people self-employed rising 2.3 percent, while those earning wages gained 0.7 percent.
Slowing Down
Gross domestic product grew 0.8 percent in the third quarter from a year earlier as the rate cuts failed to halt a slump in investment.
Capital expenditure tumbled 9.9 percent, led by a 24.6 percent slump in investment on machinery and equipment. The slowdown “has been more intense, deeper and prolonged than we expected,” Arenas said at an event in Santiago yesterday.
“We will soon see” that rate cuts and higher fiscal spending “start to stimulate once again our growth.” After reducing rates by two percentage points in 14 months, the central bank paused this month, leaving the key rate at 3 percent.
Policy makers are waiting to see if inflation slows from 5.7 percent in October, almost double the target rate, and whether the forecast revival in growth materializes.
The central bank has cut its growth forecast for this year four times as the downturn proves longer and deeper than economists expected. Policy makers may revise the forecast again next month from the current 1.75 percent to 2.25 percent.
They estimate growth of 3 percent to 4 percent for 2015. Marshall said on Nov. 23 that Chile will have “very modest” economic growth for some time.
“The economy is going through a period of very low activity, it is growing under 2 percent and we don´t envisage significant changes in the short term,” he said.
bloomberg.com
The jobless rate slid to 6.4 percent from 6.6 percent in the month earlier period, the National Statistics Institute said on its website today, compared with the 6.7 percent median forecast of 17 economists polled by Bloomberg.
Retail sales fell 0.2 percent in October from the year earlier, while manufacturing output gained 1 percent, the institute said in a separate report. Policy makers have cut interest rates by more than any other country in the past 14 months as the economy grows at the slowest pace since the 2009 recession.
While Arenas forecasts the beginning of a pick-up this quarter, central bank director Enrique Marshall told El Mercurio over the weekend that growth would remain weak into the first few months of next year.
“The report provides a certain pause in the expectations for a deterioration in the labor market and provides signs of resilience,” Felipe Ruiz, an economist at BCI in Santiago, said in an e-mailed note. “Higher unemployment may take longer than initially expected.”
The jobless rate is up from 5.8 percent in the year-earlier period, with the number of people self-employed rising 2.3 percent, while those earning wages gained 0.7 percent.
Slowing Down
Gross domestic product grew 0.8 percent in the third quarter from a year earlier as the rate cuts failed to halt a slump in investment.
Capital expenditure tumbled 9.9 percent, led by a 24.6 percent slump in investment on machinery and equipment. The slowdown “has been more intense, deeper and prolonged than we expected,” Arenas said at an event in Santiago yesterday.
“We will soon see” that rate cuts and higher fiscal spending “start to stimulate once again our growth.” After reducing rates by two percentage points in 14 months, the central bank paused this month, leaving the key rate at 3 percent.
Policy makers are waiting to see if inflation slows from 5.7 percent in October, almost double the target rate, and whether the forecast revival in growth materializes.
The central bank has cut its growth forecast for this year four times as the downturn proves longer and deeper than economists expected. Policy makers may revise the forecast again next month from the current 1.75 percent to 2.25 percent.
They estimate growth of 3 percent to 4 percent for 2015. Marshall said on Nov. 23 that Chile will have “very modest” economic growth for some time.
“The economy is going through a period of very low activity, it is growing under 2 percent and we don´t envisage significant changes in the short term,” he said.
bloomberg.com
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