Low unemployment, but the labor market does not rebound

The data on the labor market known yesterday marked a "positive innovation" compared to the previous scenario (especially against the first quarter of the year), although in the opinion of the analysts the employment still does not show clear signs of improvement and continues to be difficult for the unemployed to find a job.

According to the National Institute of Statistics (INE), in July the unemployment rate stood at 7.58% of the economically active population (PEA), down 0.2 percentage points from the previous month and one point a percentage below the value reached in July 2016. In turn, it meant the lowest value so far this year and the second lowest in the last 12 months - in October of 2016 there was only one (7.1%).

According to calculations made by El País, this marks a population of about 136,000 unemployed in July, 1,700 less than the previous month and 17,000 less than a year ago. While the employment rate (employed and job seekers) rose to 63 percent from 62.2 percent in June, although it fell two-tenths of a percentage point from a year ago.

In the case of the employment rate, it reached 58.3% and was one percentage point above the June record and five tenths above the July 2016 figure. This indicates that there are 1,657,000 employees, almost 25,000 more than a year ago and 29,000 more than the previous month.

Vixion Consultores economist Aldo Lema analyzed on Twitter that "employment went from a strong year-on-year fall in the first quarter (-17,000 jobs) to a null variation in the April-July quarter." In fact, the average unemployment rate for the first three months (8.45%) is 0.45 percentage points higher than the four months later (7.95%).

These data "introduce a positive innovation in terms of trend trends in employment", he told El País Germán Deagosto, of CPA Ferrere, and stressed that "the labor market shows a certain brake on the deterioration that was being processed, although is still incipient ". He added that while "employment stabilizes and there is a slight improvement in the unemployment rate," activity data "are still continuing to fall and that operates as a buffer (on the labor market) because it implies that there are fewer active people. "

Search.

The director of labor consultancy O + H, Neker de la Llana, told El País that "the reality in terms of employment has not changed significantly" and remains "a dynamic where the job search is requiring time, effort and patience by the candidates ".


In that sense, PwC economist Lucía Vázquez pointed out that there is an increase in the duration of unemployment, which is in eight weeks in the January-July 2017 average against 7.8 weeks in the same period of last year. "This means that people looking for work take longer to find it," in part because "the unemployed are being more demanding (on schedule, on location, or finding a job according to their experience or knowledge) and are taking longer to find a position, "he said.

De la Llana added that "levels of job creation are far from those of a few years ago," which he attributed to the decline in foreign direct investment. "We have some expectations with very large projects (like the third pulp mill of UPM) that are delayed and that the situation of the employment did not vary," he explained.

He also pointed out that the new schemes of work with a predominance of technology lead to a dissociation between the figures of growth of the economy and the generation of employment. "In the future growth will not necessarily be synonymous with more work, employment will be more associated with the matrix of skills and talents of the workforce," he said.

Precisely, Lema had highlighted a "series of positive data of the Uruguayan economy during the last weeks: GDP (grew by 2.8% in the second quarter of 2017 compared to the same period of 2016), consumer confidence (left the zone of moderate pessimism for the second time in the year) and some improvement in the labor market. "

Due to this scenario in the world of work, the director of O + H stated that "they are moments of precaution" for workers and it is not advisable to "leave a job" without having another offer, because reinsertion will require "a lot of patience and constancy".

Perspectives.

For de la Llana, the labor market will maintain "a medium-low dynamism" because "opportunities" for job creation are "scarce". Vázquez de PwC does not augur "a significant change in the trend of employment / unemployment rates", given that in recent years "economic growth has been explained mainly by sectors that are not labor-intensive, such as telecommunications; and on the contrary, sectors that are important generators of employment, such as construction or some industry branches