INDEC statistics bureau reports a 0.7 percentage point increase in the third quarter

Argentina’s unemployment rate rose to 7.5 percent in the third quarter of the year, 0.7 percentage point higher than the 6.8 percent posted in the same period of 2013, the INDEC statistics bureau stated in a report yesterday. This means 131,955 jobs have been lost in one year.

The higher unemployment rate was followed by a growing underemployment, which partly reflects those in part-time employment who want more hours. A rate of 9.2 percent was registered in the third quarter, 0.5 percentage point higher compared to the same period last year.

In a more immediate comparison, matching up to the second quarter this year, unemployment registered no variations while underemployment dropped 0.2 percentage point from 9.4 percent to 9.2 percent.

INDEC’s figures confirm that the labour market has remained virtually stagnant over the past two years. Since 2012, neither the economically active population with jobs nor unemployment have registered many variations. There are about 3.1 million people with work problems in Argentina, 1.7 million unemployed and 1.4 underemployed.

“INDEC’s report showed several negative figures at the same time. The labour market has shrunk so far this year, there’s less people looking for a job and higher unemployment and underemployment rates have been reported,” Plan Fenix economist Ariel Setton told the Herald.

“Companies have registered lower demand of their products, which means they need less workers.”

The activity rate — calculated as the percentage between the workforce and total population — was set at 44.7 percent in the third quarter, 1.4 percentage points lower than the same period last year. Meanwhile, the employment rate — calculated as the percentage between people with jobs and the total population — was 41.3 percent, 1.6 percentage points lower than the same period in 2013.

Both figures agree with the higher unemployment and underemployment rate and explain that there’s both less people with jobs and less people looking for a job.

“The lower employment and activity rates means there are less people with jobs as well as less people looking for a job. It’s normal to see this in a developed economy but not in Argentina,” Fausto Spotorno, economist and director of the Economic Studies Centre at the Orlando Ferreres consultancy, told the Herald.

“There’s lower economic activity in almost every sector, leading to a loss of jobs.”

The report on the chief indicators of the labour market was elaborated in conjunction with data collected by the Permanent Homes Survey (EPH), the national programme organized by INDEC, as well as the Directorate of Provincial Statistics (DPE), which surveys the socio-demographic and socio-economic characteristics of the population.

“It’s reasonable that there are less jobs, considering the economic decline. Nevertheless, the impact could have been greater if the government hadn’t implemented a set of policies this year,” Mariano Kestelboim, a UBA economist, told the Herald.

“Public spending has grown and the Productive Recovery Programme (Repro) is still active.”

Economic dip

The higher unemployment rate agrees with the lower economic activity registered over the last few months. The economic activity index (EMAE) dropped 1.2 percentage points in August compared to the same month last year, accumulating two consecutive months in decline. It was the highest drop since July 2009 when the economy had fallen 1.5 percentage points.

At the same time, the economic decline has lead to a lower inflation level. According to INDEC, prices rose 1.2 percent in October, 0.2 percentage points lower than September. So far this year, prices have climbed 21.4 percent, showing a lower pace over the last few months.

“There are less jobs so people are discouraged to go and look for one. It’s a trend that will probably continue until the end of the year. The government has tried to boost consumption but it’s more focused on the ‘vulture funds’ case,” Setton said.

Date: November 18, 2014

Source: http://www.buenosairesherald.com/article/174996/unemployment-grows-to-75-percent