Latin America unemployment near decade low in 2023, may reverse next year, UN labor agency says

By Marco Aquino

(Reuters) – Unemployment in Latin America and the Caribbean fell in 2023 to its lowest level since 2014, the International Labor Organization (ILO) said on Tuesday, but an expected economic slowdown in 2024 could reverse recent post-pandemic gains.

In a new report, the ILO sees unemployment in 2023 at 6.3%, below last year’s 7.2% and a major rebound from the 10.6% unemployment rate in 2020, when COVID-19 lockdowns left millions without jobs.

Regional joblessness was the lowest since 2014, when unemployment was at 6.0%, according to past ILO reports.

The UN agency said the average unemployment rate in this year’s first three quarters was 6.5%. “By including the seasonal effects of the regional labor market,” the unemployment rate through 2023 is estimated to be 6.3%, it said.

An economic slowdown in the coming year could spike unemployment, the ILO cautioned, citing forecasts from the International Monetary Fund and the UN’s Economic Commission for Latin America and the Caribbean (ECLAC) that see growth waning.

ECLAC sees the region’s economies growing just 1.9% next year, below the 2.2% growth forecast for 2023.

“This would mark a second consecutive year of sluggish economic activity for Latin America and the Caribbean, which would resemble the situation that the region experienced in the years prior to the pandemic,” the ILO report said.

In this context, “it is likely” that the regional unemployment rate for 2024 will tick up to between 6.5% and 6.8%, the report said.

If such a slowdown is accompanied by lower inflation, job growth may still continue, the ILO said, a scenario that would favor creation of informal jobs lacking the benefits of formal employment.

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