Chile extends manufacturing slide, jobless rate ticks up

SANTIAGO – Chile’s manufacturing output extended its slide in January, hit by a drop in mining and fisheries production, and the country’s unemployment rate rose, government data showed this week.

Manufacturing decreased 1.1% from a year earlier, falling short of a Reuters poll forecast for a 0.5% rise, and it declined 1.6% compared with the preceding month.

In December, manufacturing fell 0.3% year-on-year and rose 1.8% month-on-month.
Mining production in January fell 1.9% against a year earlier and 0.8% versus the preceding month. Chile is the world’s top producer of copper.

While the government has traditionally published standalone copper production numbers, the January statistics mixed copper with others metals mined in Chile, such as silver and molybdenum.

Output of salmon, a major export, has been reduced by a blight that has killed hundreds of thousands of the fish.

The unemployment rate, meanwhile, jumped to 6.2% for the November to January period, while Reuters had forecast the rate holding steady at 6.1%.

The weaker-than-expected numbers could justify a near-term cut in Chile’s benchmark interest rate, as policymakers seek to jump start growth in a context of decreasing inflation.

In its most recent quarterly monetary policy report, released in December, Chile’s central bank predicted gross domestic product growth of 1.5 to 2.5% in 2017. Gross domestic product rose a more modest 1.2% in annual terms in December.

Central bank policymakers cut the interest rate 25 basis points in January and have signalled that more short-term easing is likely.