By Taos Turner
BUENOS AIRES--Argentina's unemployment rate rose to 7.5% in the second quarter as the country's recession appeared
to worsen and more companies laid off workers.
The jobless rate, published by the government on Tuesday, is up from 7.1% in the first quarter and 7.2% a year
earlier.
Economists expect the unemployment rate to rise further this year as the recession worsens and more people find it
harder to find jobs.
"We expect the economy to contract by around 3% this year," said Ariel Coremberg, a University of Buenos Aires
professor who specializes in measuring economic growth. "Of course, with this decline in growth the jobless figure will
worsen in the private sector, mainly in the industrial sector. The unemployment situation is going to get worse in the
second half of the year."
Argentina's automotive industry has been hit hard this year, both by weaker demand at home and from lower sales to
Brazil, Argentina's top trading partner. Last month, vehicle production fell about 31% from a year earlier while sales
crashed almost 34%.
In recent years, Argentina's federal government and provincial governments have been key sources of job creation.
Mr. Coremberg said private-sector job creation hasn't been as impressive and that many new jobs are in the underground
economy, where neither employees nor employers pay taxes.
Mr. Coremberg, who helped calculate economic growth for the government for about a decade until 2007, said that
unlike Argentina's last recession in 2009, this one cannot be blamed on the global financial crisis or on problems in
the U.S. or China.
With inflation thought to be around 40% annually, demand for durable goods such as cars and home appliances has
plummeted. What' is worse, Mr. Coremberg said, is that demand for food and beverages has also declined, indicating the
recession is taking a toll on average Argentines. The consumer-spending boom that fueled growth over the past decade has
finally hit a wall.
In addition, Argentina's recent debt default has led many economists to lower their expectations for economic
activity this year, with many saying the economy may not grow again until 2015.
Write to Taos Turner at taos.turner@wsj.com
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