The urban unemployment rate in Colombia increased to 13% in the May-July period. Last year’s value of 12.8% indicates that unemployment in Colombia remains at a crisis level and highlights the inability of the economy to boost job creation. Along with unemployment, the global participation rate (65.6% from 64.8% last year) and the occupation rate (57.1% from 56.6%) also increased. The biggest contributor to job creation was the retail, restaurants and hotels sector, totaling 30.5% of the occupied workforce. Compared with a year ago, the sector grew 4% y/y. Communal services increased 3.6% y/y and accounted for 22.7% of the total workforce. Manufacturing, which accounts for 17% of the total workforce, failed to grow, while real estate, with 9.6% of the total workforce, contracted 2.8% y/y.
Urban Unemployment Rate in Colombia (13 Cities)
The high level of unemployment has a limiting effect on domestic demand, despite improvements in consumer confidence and credit creation. Given our sluggish global growth outlook, especially in the U.S., and only slowly improving domestic demand, we expect Colombia’s economy to stay below trend in 2010, perhaps growing at 3.8% on average.
Editor’s Note: This post is excerpted from a much longer analysis available exclusively to RGE Clients, Brazil’s Industrial Output Disappoints; Dilma Favorite for Presidency
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