When the future feels hopeless
The March Monthly Index of Economic Activity (IMACEC) surprised both the market and the Central Bank on the upside. Nevertheless, the Bank recently revised the figures downward. The outlook for consumption is far from positive: the IMACEC showed a fifth consecutive fall in commerce. But a more gradual decline in retail sales and a rebound in imports is consistent with households making use of their liquid assets.
The outlook for investment is gloomy. Business confidence fell again in April, and at a faster pace than in previous months. The deterioration was widespread across sectors, and affected both perceptions of the current situation and expectations. All of this is unfolding amid a context of sociopolitical uncertainty, a slowdown in activity and multiple global shocks.
Exports in April reversed February’s gains, amid a somewhat weaker copper price. There was also a decline in the value of imports, but the trade balance surplus narrowed. The four-quarter accumulated current account deficit rose to relatively high figures, but there is no need to worry about the country’s balance sheet for the moment.
Job creation continued in Q1 2022, but at a declining pace. The pre-pandemic level of employment has not yet been recouped. The good news is that labor market dynamics have been dominated by the non-farming private payroll. During March, nominal wages and labor costs decelerated, and both fell further in real terms.
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