Chile Unemployment Dips for Second Month Amid Job Spending Plan

Chile’s unemployment rate fell for the second consecutive month and retail sales soared as the government plows billions of dollars into plans to recover jobs lost during the coronavirus pandemic.

The country’s jobless rate fell to 12.3% in the three months through September, the national statistics agency reported on Friday, below the 12.8% median estimate of economists in a Bloomberg survey. Separately, retail sales surged a greater-than-forecast 9.5% from a year ago, while manufacturing and industrial production unexpectedly expanded.

Chile Unemployment Dips for Second Month Amid Job Spending Plan

President Sebastian Pinera is broadening efforts to pull one of Latin America’s most prosperous economies out of a slump, announcing a plan last month to spend $2 billion on job subsidies. Growth is also getting a short-term boost from early pension withdrawals and the roll-back of anti-virus lockdowns. Still, some analysts say uncertainty will rise after the country voted in a referendum to rewrite its constitution.

Unemployment is still near the highest level in comparable data that goes back to 2010. The number of jobless workers leaped 46% from a year ago to about 1.04 million. The number of people with formal employment fell 18.2%, while those in the informal sector tumbled 29.9%.

Aside from the job creation program, Pinera’s administration has introduced emergency measures including low-interest loans, delays on mortgage payments and rent subsidies. Separately, Chile’s Congress is debating a bill that would allow for a second round of pension withdrawals, though the government opposes the proposal.

Chile’s coronavirus outbreak peaked in June, when the country recorded one of the world’s highest infection rates per capita. This week, the country recorded its lowest number of daily virus cases since May.

©2020 Bloomberg L.P.

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