Peru | Initial indicators show strong deterioration of the labor market in March

Summary

Containment measures to slow down the spread of COVID-19 are having a negative impact on employment, job quality and wage incomes. The recovery in employment will be very gradual given a fragile expected recovery in economic activity

Key points

• Key points:
• Based on the evolution of employment in the first months of the year, we estimate that in March alone the employed EAP in Lima fell by around 288,000 people with respect to the same month of the previous year
• There was a sharp deterioration in the quality of employment in March. In Lima, the adequately employed EAP fell by 400,000 people, while the number of people underemployed increased by just over 100,000
• The intention to hire over the next 3 months is below that registered in the 2008 crisis, a worrying situation bearing in mind that 66% of workers (dependent and formal) have fixed-term contracts, are on probation, under internships or similar arrangements

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