The unemployment rate in PE rose modestly to 5.90% in November 2025, up 0.20 percentage points from October’s 5.70%. This figure aligns with market estimates but contrasts with the downward trend observed earlier in the year. Since March 2025, unemployment has fluctuated between 5.70% and 6.60%, reflecting ongoing labor market adjustments amid evolving economic conditions.

Drivers this month

• Seasonal layoffs in manufacturing and agriculture sectors contributed 0.15 percentage points.
• Service sector hiring slowed, adding 0.05 percentage points to unemployment.
• Labor force participation increased slightly, diluting employment gains.

Policy pulse

The current unemployment rate remains above the central bank’s target range of 4.50%–5.50%, signaling room for accommodative monetary policy. Inflation remains moderate, allowing the central bank to maintain steady interest rates without aggressive tightening.

Market lens

Immediate reaction: The PEN currency depreciated 0.30% against the USD in the first hour post-release, reflecting concerns over slower job growth. Local equity markets, represented by PESTOCK, declined 0.50%, while bond yields edged higher.

Unemployment is a core macroeconomic indicator that reflects labor market health and economic momentum. The 5.90% rate in November contrasts with a peak of 6.60% in April 2025 and a low of 5.70% in October, indicating moderate volatility. GDP growth for PE slowed to 2.10% YoY in Q3 2025, down from 2.80% in Q2, correlating with the uptick in unemployment.

Monetary Policy & Financial Conditions

The central bank has held the benchmark interest rate steady at 3.25% since September 2025. Financial conditions remain moderately loose, with credit growth at 4.50% YoY. The unemployment rise suggests the labor market is not overheating, reducing pressure on the central bank to tighten policy imminently.

Fiscal Policy & Government Budget

Fiscal stimulus measures, including infrastructure spending and targeted subsidies, continue to support employment. However, the government’s budget deficit widened to 3.80% of GDP in Q3 2025, limiting scope for further expansionary fiscal policy without risking debt sustainability.

External Shocks & Geopolitical Risks

Global supply chain disruptions and geopolitical tensions in neighboring regions have constrained export growth, indirectly affecting domestic employment. Commodity price volatility also weighs on PE’s resource-dependent sectors.

Drivers this month

• Manufacturing layoffs: 0.10 pp
• Service sector slowdown: 0.05 pp
• Increased labor force participation: 0.05 pp

Market lens

Immediate reaction: The local bond market saw a 5 basis point rise in 2-year yields, reflecting increased risk premiums. The PEN/USD exchange rate weakened by 0.30%, indicating investor caution on PE’s growth outlook.

Looking ahead, the unemployment rate in PE faces multiple influences. The base case scenario projects a stable rate near 5.90%–6.00% over the next quarter, assuming moderate GDP growth and steady fiscal support. Bullish and bearish scenarios outline wider possibilities.

Scenario analysis

• Bullish (20% probability): Accelerated job creation driven by renewed export demand and easing geopolitical tensions could lower unemployment to 5.50% by Q1 2026.
• Base (60% probability): Continued moderate growth and fiscal stimulus maintain unemployment around 5.90%–6.00%.
• Bearish (20% probability): Prolonged external shocks and tighter global financial conditions push unemployment above 6.30%, risking a slowdown in consumer spending.

Structural & Long-Run Trends

PE’s labor market faces structural challenges including skill mismatches and informal employment. Long-term unemployment remains elevated at 1.80%, signaling persistent frictions. Demographic shifts and automation trends will also shape future employment dynamics.

The November 2025 unemployment rate of 5.90% signals a labor market in cautious balance. While the increase from October tempers optimism, it remains below the 12-month average, reflecting resilience amid external pressures. Policymakers face a delicate task balancing support for growth with fiscal prudence. Investors should monitor upcoming GDP releases and geopolitical developments closely.

Key Markets Likely to React to Unemployment Rate

The unemployment rate in PE influences several key markets. The PESTOCK index often tracks labor market shifts, reflecting corporate earnings expectations. The currency pair PENUSD is sensitive to employment data, impacting capital flows. Among cryptocurrencies, BTCUSD shows inverse correlation during risk-off periods triggered by weaker labor data. The bond ETF PEBOND reacts to yield changes driven by unemployment trends. Lastly, the forex pair EURPEN reflects regional economic sentiment linked to PE’s labor market.

FAQs

What does the November 2025 unemployment rate indicate for PE’s economy?

The 5.90% rate suggests moderate labor market softness amid slower GDP growth and external pressures.

How does the unemployment rate affect monetary policy in PE?

The rate above the target range supports a cautious monetary stance, limiting immediate rate hikes.

What are the risks to the unemployment outlook in PE?

Risks include prolonged geopolitical tensions, supply chain disruptions, and fiscal constraints.

Key takeaway: PE’s labor market shows resilience but faces headwinds that could keep unemployment near 6% in the near term.