Chile Jobless Rate Hits Highest in a Decade, Retail Sales Slump

(Bloomberg) -- Chile’s unemployment rate rose to the highest in a decade and retail sales slumped by almost a third as the coronavirus pandemic forced much of the country into lockdown.

The jobless rate increased to 9.0% in the three months through April from 8.2% in the month-earlier period, the national statistics institute said Friday. That compares with the 9.1% median estimate of analyst surveyed by Bloomberg.

Chile’s labor force fell 5.7% in the 12 months through April as more than half a million people gave up on looking for work, INE said at a press conference Friday. The jump in people outside the labor market helped reduce the impact of the lockdown on the unemployment rate.

The figures are likely to get worse in May when a jump in new cases of the coronavirus forced the government to expand the lockdown to all of Santiago. Long lines formed to register for unemployment insurance payments, even amid the social distancing measures. Still, the situation is better outside the capital, where some authorities are beginning to lift restrictions.

The statistics agency also reported Friday that retail sales tumbled 31.3% in April from the year earlier, more than the 25% pace expected by analysts and compared with a drop of 14.9% the month before.

Key Insights

• Manufacturing contracted 5.9% YoY in April, compared with the median forecast for a drop of 5%
  • Decline was partially explained by a 2.7% y/y dip in food production
• Industrial production, which includes mining and utilities, slid 3.8%, compared with the 2.7% forecast by analysts
  • Mining output fell 0.5% y/y, while electricity, gas and water production contracted 7.4% y/y
• Copper production slid to 474,880 metric tons in April from 498,083 the month before

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• Earlier this week, Chile’s Chamber of Commerce reported in-store retail sales in the capital Santiago contracted 45.9% year-on-year in April
  • The Chamber called on the government for a plan to promote technological reconversion in the industry and its shift toward e-commerce
• According to a report published by Chile’s Labor Ministry on May 26, more than 92,200 companies have requested access to the Employment Protection Law for more than 569,000 workers, while over 4,000 firms have applied for a temporary reduction of working hours for more than 24.000 employees

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