Chile Unemployment Falls to Pre-Pandemic Level as Economy Soars

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Chile’s unemployment rate fell for the eight straight month in November, reaching levels last seen before the pandemic, as a consumer spending boom and soaring inflation prompts the central bank to hike interest rates.

The jobless rate dropped to 7.5% in the three months through November, below the 7.8% median estimate from analysts in a Bloomberg Survey. Retail sales rose 16.7% year on year in November, while manufacturing gained 5%, the national statistics institute reported on Friday.

Analysts surveyed by Bloomberg expected retail sales to grow 19.7% while manufacturing production was in line with estimates. Mining activity fell 0.6%, the institute said.

Cash transfers provided by the government during the pandemic and early pension withdrawals have stoked consumer demand, pushing economic growth to as much as 11.5% this year. In response, policy makers have delivered four consecutive rate hikes and warned that borrowing costs will have to remain high for an extended period of time. The central bank lifted its inflation forecast for 2021 to 6.9% earlier this month, from 5.7%. 

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