Montevideo, Uruguay & Santiago, Chile - Recent reports from Uruguay and Chile indicate slight shifts in their respective labor markets. In Uruguay, the unemployment rate experienced a marginal decrease in February, the final month under the leadership of President Luis Lacalle Pou. Meanwhile, Chile's latest employment data covering the December 2024 to February 2025 period reveals a minor year-over-year decline in joblessness, though it saw an increase compared to the previous quarter. These changes occur against a backdrop of political transition in Uruguay and ongoing economic adjustments in both nations.

Uruguay's Labor Market Shows Stability with Rising Informality

Uruguay's National Statistics Institute (INE) reported that the unemployment rate for February 2025 fell to 7.9%, a slight improvement from the 8.1% recorded in January. This also marks a 0.4% decrease compared to February of the previous year, leaving approximately 150,900 individuals without employment. The employment rate held steady at 59.4%, while the activity rate saw a minimal contraction to 64.5% from 64.6%.

Notably, the unemployment rate differed between regions, with Montevideo registering a lower rate of 6.6% compared to 8.8% in the interior of the country. Economist Aldo Lema highlighted that around 25,000 jobs were created year-over-year, characterizing the overall labor market as stable.

However, the report also pointed to a concerning trend: a sharp increase in informal employment. The percentage of workers not registered for social security rose to 22.5%, representing a 1.2 percentage point increase from January and a 0.4 percentage point rise from February 2024. Underemployment also saw an uptick to 9.2%, although it remains below the levels observed in the previous year.

These figures mark the final labor market statistics under President Luis Lacalle Pou, with Yamandú Orsi having assumed office on March 1st. The new administration will likely be closely monitoring these trends, particularly the rise in informality, as it shapes its economic policies.

Chile Sees Marginal Unemployment Decrease Amidst Gender Disparity

In Chile, the National Employment Survey (ENE) by the National Institute of Statistics of Chile (INE) revealed an unemployment rate of 8.4% for the December 2024–February 2025 period. 1  This represents a slight 0.1 percentage point decrease compared to the same three-month period a year prior but an increase from the 8.0% recorded in the previous quarter (November 2024 - January 2025).   

The survey indicated a 0.9% increase in overall employment, with notable gains in sectors such as transport, financial activities, and public administration. Encouragingly, the informal employment rate declined to 26.1%, with fewer individuals working informally in commerce and manufacturing.

However, the data highlighted a widening gender gap in unemployment. While joblessness among men decreased by 0.4 percentage points to 7.7%, the unemployment rate for women rose by 0.3 percentage points, reaching 9.3%. This disparity was further reflected in participation and employment rates, which saw slight declines for women. The number of women outside the labor force also increased. In contrast, the male labor force and employment saw increases.

Seasonally adjusted unemployment in Chile stood at 8.5%, and the average number of working hours experienced a slight decrease. These figures suggest a nuanced labor market where overall employment is growing, but challenges remain, particularly concerning gender equity in job opportunities.

Looking Ahead

The slight decreases in unemployment in both Uruguay and Chile offer a glimpse into the evolving economic landscapes of these South American nations. While Uruguay's labor market appears stable, the increasing rate of informality presents a challenge for the new administration. In Chile, the marginal decrease in unemployment is tempered by the concerning rise in female joblessness, indicating a need for targeted interventions to ensure equitable employment opportunities. Monitoring these trends in the coming months will be crucial to understanding the long-term trajectory of their respective economies.

[Copyright (c) Global Economic Times. All Rights Reserved.]