Colombia | Unemployment increased in June, triggering some labor market warnings

Summary

In June 2022, the national and urban unemployment rates were 11.3% and 11.7%, respectively. The seasonally adjusted comparison with respect to the previous month shows an increase in both rates. Job creation slowed and the population outside the labor force increased, generating alerts in the labor market.

Key points

• Key points:
• In June 2022, the national and urban unemployment rate (which corresponds to 13 cities and metropolitan areas) stood at 11.3% and 11.7%, respectively. The comparison of the seasonally adjusted series with respect to the immediately preceding month shows an increase of 1.2 pp in the national unemployment rate and an increase of 0.4 pp in the urban rate.
• The level of employment (employed people) represented 99% of its pre-pandemic level at the national level, and 97% at the urban level. These levels are still lagged behind economic activity, as measured by the economy tracking index –ISE (for its acronym in Spanish)-, which by May had reached 113.4% of its Feb. 2020 level.
• Based on pre-pandemic levels (Feb 2020), the challenge remains at the national level to recover more than two million people who dropped out of the labor force due to the pandemic.
• DANE launched a new methodology for measuring informality, which shows an informality level of 58% at the national level and 44.3% in urban areas.
• Although it is expected that the economy will continue to recover employment and that it will be able to incorporate again the people who migrated out of the labor force, the evidence of a decrease in the employed level, the increase in unemployment rate and the difficulty of recovering the population that left the labor force due to the pandemic, raises concerns regarding the economy's ability to resume the pace of employment recovery for the second half of the year, and therefore, continue to see significant improvements in the unemployment and employment rates.

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