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

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By Marco Aquino

(Reuters) – Unemployment in Latin America and the Caribbean fell to its lowest level since 2014 in 2023, 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 at 6.3% in 2023, down from 7.2% last year and a significant recovery from the 10.6% unemployment rate in 2020, when the COVID-19 lockdown left millions out of work .

Regional unemployment was the lowest since 2014, when unemployment reached 6.0%, according to previous ILO reports.

The UN agency said the average unemployment rate in the first three quarters of this year was 6.5%. “Taking into account the seasonal effects of the regional labor market, the unemployment rate by 2023 is estimated at 6.3%.

An economic slowdown in the coming year could increase unemployment, the ILO warned, citing forecasts by the International Monetary Fund and the United Nations Economic Commission for Latin America and the Caribbean (ECLAC) that growth is weakening.

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

“This would mark the second consecutive year of sluggish economic activity for Latin America and the Caribbean, reminiscent of the situation the region experienced in the years before the pandemic,” the ILO report said.

Against this backdrop, the regional unemployment rate is “likely” to rise to 6.5% to 6.8% for 2024, 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 the creation of informal jobs that lack the benefits of formal employment.