UPDATE 2-Chile jobless rate ticks up to 6.6 pct in Aug-Oct period
* Jobless rate above market forecast of 6.4 pct * Work force grew faster than employment * Jobless rate was 6.5 percent in July to September * Jobless rate shrank vs 7.2 pct in year-earlier period SANTIAGO, Nov 30 (Reuters) - Chile's jobless rate for the August to October period rose slightly as the work force grew faster than the increase in employment, the National Statistics Institute (INE) said on Friday. The unemployment rate increased to 6.6 percent, following a July to September jobless rate of 6.5 percent. It was forecast to have dropped to 6.4 percent for three month period ending in October, according to the median response of 10 analysts and economists polled by Reuters. "The retail sector and a seasonal effect in agriculture pushed up employment, though this was pared back by decreases in hotels and restaurants, transport, storage and communications," the INE said. However, some analysts noted that Chile remains close to boasting full employment and that the jobless rate has significantly eased from the 7.2 percent level it clocked in the August to October period of 2011. "We think the dynamism of the labor market continues to pose an upward risk on inflation in the medium term," BICE Inversiones said in a note to clients. "If this behavior persists, we think it could lead the central bank to harden its monetary policy message in the next months." The central bank's benchmark interest rate has stayed on hold at 5 percent since a cut in January largely because the Andean nation has shown better-than-expected resilience to slowing demand from top trade partner China and fallout from the euro zone's crisis. The bank is seen holding its key rate again at its monetary policy meeting on Dec. 13, and it is seen at that level in three and six months, the bank's fortnightly poll of traders showed on Wednesday. But traders now see the rate inching up to 5.25 percent in 24 months time. A tight labor market, robust domestic demand and firm economic growth have helped small, export-dependent Chile defy expectations for a shaper slowdown despite the euro zone's debt crisis and moderating demand from top trade partner China. "In Chile, there are medium-term inflationary risks, due to exhaustion of output gaps and a persistently dynamic domestic demand," central bank board member Joaquin Vial said in prepared remarks on Friday. "Chilean activity has outperformed that of other countries, particularly developed economies. But, given existing financial and commercial links, it is unreasonable to think that our country will be spared the effects of events abroad," Vial added. On Friday, both Brazil and India announced disappointing quarterly economic growth rates, raising new fears that big emerging markets are getting dragged into the stagnant morass of the global economy. Export-dependent Chile has so far fared better than expected amid fears of a slowdown, with the economy expanding 5.7 percent in the third quarter from a year earlier.
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