Labor Market Report – Reactivation of job creation and financial determinants of corporate labor demand during the pandemic

KUALA LUMPUR, 25 JULY 2026 —

Colombia’s unemployment rate fell to its lowest level since the pandemic last month as hiring rebounded outside the main cities, the central bank said.

The rebound follows six months of stagnation in the first half of the year. Non-salaried employment, which had stalled in the second quarter because of fresh Covid-19 waves and security unrest, resumed growth, the report said.

Formal-sector vacancies rose in the main cities and employers’ staffing expectations improved, pointing to further gains in the third quarter. Sectoral performance remained uneven: recreation and manufacturing lagged, while labour productivity returned to pre-pandemic levels after the 2020 slump in hours worked.

Labour-force participation climbed as schools and care facilities reopened, yet the jobless rate kept falling because hiring outpaced new entrants. The gap between vacancies and unemployment—the Beveridge curve—stayed wide, signalling a slack labour market that is unlikely to push up wages or inflation.

Hourly earnings, especially for non-salaried workers, remained below their early-2020 peaks, keeping cost pressures muted.

The central bank now expects the national unemployment rate to ease gradually through the fourth quarter of this year and 2027. It forecasts the rate will fall to between 11.2% and 13.3% by December and average between 10% and 13% next year.

The estimate implies Colombia’s urban jobless gap—the shortfall versus the non-accelerating-inflation rate of unemployment—will narrow from about 2.6 percentage points this year to 1 point in 2027, but spare capacity will still remain.

The Labour Market Report, issued quarterly by the central bank’s Labour Market Analysis Group since 2017, also examined how the pandemic reshaped formal firms and their payrolls. It found that while smaller companies cut staff more aggressively, large firms reduced headcount selectively based on financial health.

Firms with low productivity, thin liquidity, narrow margins or high leverage made the deepest headcount reductions. “Financial health was a critical filter for job preservation during the crisis,” the report said.

Wide disparities in unemployment persisted, both between cities and by gender, with women still facing the largest gaps.

Policy makers will watch next quarter’s vacancies data and wage growth for signs that spare capacity is shrinking faster than expected.