(Adds copper output, month-on-month data comparisons, comment,
SANTIAGO Feb 28 Unemployment in Chile rose more
than expected and manufacturing output slid in January, adding
weight to signals that the economy of the world's top copper
exporter is entering a weaker phase.
Chile's jobless rate for the November to January
period rose to 6.1 percent, the government said on Friday, up
from 5.7 percent in the fourth quarter of last year and driven
principally by fewer new jobs being created in agriculture, a
sector that was hit hard by a late spring frost.
Although unemployment has been hovering near multi-year lows
in recent months, the rise was considerably sharper than
forecast, with markets having expected the figure closer to 5.8
Meanwhile, a fall in chemicals and metals production led
January factory output down 1.4 percent in the 12
months to January, and down 0.5 percent compared to December, a
performance that extends an anemic trend that began in September
Chileans continued to shop, though, albeit at a less
frenetic pace than in recent times. Retail sales - which have
been a key driver of the economy - rose 6.8 percent compared
with a year earlier, the lowest annual rise in twelve months.
The recent depreciation of the Chilean peso had in
particular affected sales of imported cars, the statistics
institute said. The peso has lost over 6 percent of its
value compared to the U.S. dollar in the year to date.
The other key support of the Chilean economy - copper, which
accounts for over half of exports - also had a relatively rough
month, with production falling 3 percent from a year ago and
nearly 13 percent from December.
The downbeat data increases expectations that the central
bank will again cut the key benchmark interest rate at its next
monetary policy meeting on March 13, having reduced the rate by
75 basis points to 4.25 percent since October.
The bank gave a negative bias alongside its decision to cut
from 4.5 percent this month, and most in the market foresee a
further reduction to 4.0 percent next month, likely drawing the
easing cycle to an end.
"The industrial data shows that the economy's slowdown is
fully continuing. In addition, the labor market data, while not
negative, indicate that it is losing dynamism," said Matias
Madrid, chief economist with Banco Penta in Santiago.
That added to the likelihood of an interest rate cut by the
central bank in March, he added.
The data also highlights the economic challenges facing
incoming center-left president Michelle Bachelet, who is set to
take office on March 11.
For the unemployment data, see here
For the manufacturing, retail sales and copper data see here
(Reporting by Alexandra Ulmer, Felipe Iturrieta and Rosalba
O'Brien Editing by W Simon)