The registered unemployment rate edged down to 9.0% in August from 9.1% in July, according to figures of the statistical office, released on Tuesday. The decline of the unemployment rate slightly decelerated to 14.4% y/y but employment growth remained strong at 3.6% y/y. The growth of people employed by someone else edged down to 3.3% y/y, driven by a slight slowdown in the growth of those hired by natural persons. Meanwhile, the number of self-employed accelerated its growth to 5.5% y/y, primarily driven by an increase in the number of farmers, a traditional pattern during the summer. In that regard, non-farm payrolls rose by 3.2% y/y in August, easing slightly from 3.3% y/y in July. To note, the labor force expanded by 1.6% y/y and remained unchanged in monthly terms.
Looking forward, the decline of the unemployment rate is likely to accelerate further on the back of strengthening economic activity and thus high labor demand. In fact, the unemployment rate is now most likely to fall below the government’s projection for 2017 at 9.7%, in our view. Meanwhile, the expansion of the labor force remains steady and thus we do not expect any significant wage growth above current levels in the near term.