Unemployment rose sharply in the first quarter and reached 7.7%, the highest since the end of the pandemic

Unemployment rose sharply in the first quarter and reached 7.7%, the highest since the end of the pandemic
Unemployment rose sharply in the first quarter and reached 7.7%, the highest since the end of the pandemic

He unemployment increased strongly (0.8 percentage points -pp) to 7.7% during the first quarter of the government of Javier Milei compared to the same period of the previous year, as a result of the significant recession suffered by the economy, as reported this Monday by the National Institute of Statistics and Censuses (INDEC). This is the highest indicator since the exit from the pandemic, in the second quarter of 2021.

Extrapolated to the total population, the number of unemployed reached 1,731,000 in the first quarter. So, the new unemployed total about 180,000 more people compared to the same period of the previous year, he specified Ambit the economist and director of the Center for Political Economy (CEPA), Hernan Letcher.

Inside of working population (44.3%), it was highlighted that the 74.7% are employeesMeanwhile he 35.7% do not have a retirement discount. On the other hand, the 21.9% self-employedhe 3.2% are patrons and the 0.3% are unpaid family workers.

Regarding the composition of the employment ratethe economists highlighted that although there is a “small increase” in registered work (21.1% vs. 21.2%), this is not representative. “The Permanent Household Survey (EPH) -with which this data is based- is subject to a margin of sampling error and only includes 63% of the country. To do this, data is taken from Argentine Integrated Pension System (SIPA)which are 100% representative”, highlighted Schteingart and specified that in That period, 34,000 new jobs were registered. “It is actually misleading, given the growth that was recorded until September and that from there the decline begins,” he noted.

However, the EPH is the only way to measure the unregistered employmentwhich happened from 11.4% to the 12.3%an increase of 0.9 pp “For every 100 inhabitants, about 11 are salaried workers without contributions, while last year there were 12. This seems to suggest that informal employment suffered more than formal employment”explained the economist.

In comparison with the first quarter of 2023, the activity rate went from 48.3% to 48% (-0.3 pp) while that of employment presented a decrease of 0.7 pp, falling from 45% to 44.3%.

The underemployment rate was located in the 10.2% of the Economically Active Population (PEA)while other busy claimants and non-plaintiffs available together they achieved the 11.7% of the PEA.

Consequently, the pressure on the working marketmade up of the universe of unemployed, underemployed, employed demanders and employed non-demanders availablereached the 29.5% of the PEA, an increase of 2.6% pp compared to the same period in 2023, when this indicator reached 26.9%.

“All the rates that describe the behavior of the labor market worsened in this quarter”highlighted the consultant LCG.

Unemployment at 3-year highs: higher unemployment among women

Besides, the employment rate in women from 14 to 29 years old was located in 3. 4% in front of 36.5% (-2.5 pp) from a year ago, while for the men of the same age group this rate reached 45.2% against him 47.4% (2.1 pp) previous.

Meanwhile, the relative unemployment rate of women 30 to 64 years old showed an increase of 2 pp, going from 22.9% to 24.9%. For its part, this rate in men of the same age registered an increase of only 1.3 pp, (23.1% vs. 24.4%).

Unemployment: the regions with the highest unemployment rate

Among the regions, those that showed the highest level of unemployment were Greater Buenos Aires and the Pampeanawith 9% and 6.8%, respectively. At the same time, it is highlighted that the region with the lowest rate was Whose (4.5%).

“There were disparities in the increase in unemployment between regions. Greater Buenos Aires and the Northeast were the most affected with increases of 1.3 and 1.4 pprespectively, compared to last year, reaching rates of 9% and 5.9%. In the suburbs, the rate reached 9.9%“he highlighted LCG.

In contrast, the consultant highlighted that the pampas region showed a decrease in unemployment of 0.5 pp.

Unemployment: what is expected going forward?

Regarding the future perspective for the employment, economists agree that it is not auspicious. The different economic indicators As the consumption and the activity continue to decline (or with a slight improvement, depending on LCG), which prevents a short-term recomposition of the labor market. Even due to the seasonality of employment, it is possible that in the coming quarters the increase in unemployment be older.

Unemployment in the second quarter will probably show a greater year-on-year increase. Now the percentage point is not reached, but probably between April and June it will be more than one point, although that does not necessarily mean that unemployment will rise compared to the first quarter. This is explained because the first quarter is usually a quarter of high unemployment seasonally“.

For its part, LCG said that “These results were expected in a recessive framework and without a doubt they had their effect in moderating increases in prices and wages.”

“For the second quarter of this year it is possible that we will see an attenuation of the deterioration in labor market numbers due to a eventual (slight) improvement in activity indicators. However, it is possible that the improvement in the unemployment rate will be somewhat undermined by the increase in the EAP. Likewise, there are still relative price adjustments that will surely impact the level of activity again,” he predicted.

Source: Ambito

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