Unemployment hits million-person milestone as Chilean manufacturing jobs collapse

The unemployment rate brushed 9.8% in the July-September quarter, surpassing one million jobless for the first time since the pandemic, and that single data point was enough to trigger a sell-off that dragged the IPSA to lows not seen since June, pushed the dollar back toward $1,000, and turned the labor market into the dominant axis of Chile's economic conversation. This isn't an isolated figure: it is the crystallization of a structural deterioration that economists have been warning about for months and that today took on an unavoidable political dimension.

The Instituto Nacional de Estadísticas reported a net destruction of 102,875 jobs over twelve months, the sharpest contraction since early 2021, with manufacturing as the main protagonist of the collapse: nearly 80,000 jobs lost in that sector, its worst reading since the pandemic. The executive director of Horizontal, María José Abud, noted that what is worrying is not just the level but the direction: unemployment rose two-tenths in a quarter when seasonally it should have held steady, revealing underlying deterioration rather than mere cyclical noise. Economists are already projecting the rate could reach 10% in the coming months, and SOFOFA seized the moment to reiterate that executing projects currently under environmental review could cut unemployment from the current 9.6% to 8%, insisting that regulatory bottlenecks and legal uncertainty are the central obstacle.

President José Antonio Kast acknowledged from the Congreso de las Regiones in Concepción that the lack of jobs is "the greatest pain we have as a nation," though he opted for forward-looking optimism, appealing to a pipeline of unblocked investments and initiatives like the Plan Chile Despega. The gap between that rhetoric and the reality of the numbers did not go unnoticed in the markets. The IPSA closed lower, SQM suffered from lithium's drop to its lowest level of the year, and the peso lost ground on a session in which the Brazilian real and the Mexican peso also retreated, partly due to disappointing results from Alphabet that hit global risk appetite. The dollar hit an intraday high of $997.15 before easing to $991, accumulating nearly $7 over two sessions. The Federal Reserve held rates and hinted at an additional hike, reinforcing the differential that keeps pressure on emerging-market currencies.

Against this backdrop of macroeconomic fragility, it is paradoxical — and revealing — that corporate earnings statements tell a completely different story. ENAP more than doubled its accumulated earnings through September, reaching an all-time record of US$1.112 billion, with operating income growing 109% thanks to refining margins boosted by the Iran conflict and a sales mix skewed toward higher-value-added products like gasoline and jet fuel. The state oil company has already transferred US$500 million in dividends to the Treasury, no small relief for public accounts in a year of budget adjustment. Enel Américas, the Italian utility's subsidiary that operates throughout Latin America excluding Chile and whose shares trade on the Santiago Stock Exchange, reported earnings of US$902 million through September, up 41%, driven by Colombia and Brazil, where the appreciation of the Colombian peso and Brazilian real amplified operational performance. Parque Arauco lifted its earnings 30% in the third quarter, to more than US$37 million, with revenues growing 18.6%, although its Chilean sales contracted slightly, more than offset by the dynamism of Peru and Colombia. The shopping-center operator linked to the Said family also closed the purchase of Mall Paseo Quilín and announced the expansion of Mall Curicó alongside Ripley, committing US$166 million in local investments. Embonor, the Coca-Cola bottler with operations in Chile and Bolivia, more than doubled its earnings through September, with EBITDA growing 12% thanks to cost containment and physical sales volumes advancing 5%.

Codelco offers the day's most uncomfortable contrast. The state copper producer dismissed eight executives and professionals tied to the Chuquicamata, Ministro Hales, Salvador and Head Office divisions, as a direct consequence of an internal audit that detected erroneous production figures in 2024 and 2025, where copper in process was booked as finished output. The decision — which already adds up to several rounds of dismissals since the scandal surfaced — is framed within what the company described as "a broader process of reviewing and strengthening management." Simultaneously, Codelco countersued a company linked to Pullman Bus that was demanding US$71 million from it, arguing that its counterparty is insolvent. On the governance front, the reputational damage from the overproduction continues to take its toll at a moment when lithium is falling to year-to-date lows and copper slipped 0.79% on the London Metal Exchange.

On the energy front, marginal electricity costs reached their lowest level in nearly 24 years — around US$7 per MWh at the Alto Jahuel node — pushed down by heavier rainfall, a sign of transitory relief for industry but also a reminder of the Chilean power system's dependence on hydrological conditions. The El Niño phenomenon is also focusing attention on the agricultural sector: the government declared an agricultural emergency in 14 municipalities in Maule after storms damaged the fruit sector, while the Matte Group presented President Kast with a US$38 million wildfire-prevention plan for the coming summer. The blueberry export season kicked off with a 3% reduction in initial projections, although shipments would still run 1.25% above the previous cycle.

What lies ahead demands attention on several fronts simultaneously. The pension debate — and the controversy over when the State will make its first contribution to the Fondo Autónomo de Protección Previsional, with the 2027 Budget allocating no resources for it — will continue to strain political negotiations. The US PCE data could offer new clues about the Fed's trajectory and, with it, about the floor for the peso. And the APEC meeting in Shenzhen in November, where the Chilean business agenda will focus on commercial digitalization and critical minerals, will offer a thermometer of how much room Chile has to position itself in global supply chains in an increasingly fragmented geopolitical environment.

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