Paraguay Jobless Rate Falls to Record Low

What makes the report economically important is not just the headline drop in joblessness, but the quality of the gains. Formal non-agricultural employment increased by 92,166 in the past year and by 227,081 during the current administration, according to the data cited by the government. That matters because formal jobs typically bring higher and more stable incomes, legal protections and social security contributions, while also improving public revenue over time.

The gains were concentrated in services, especially commerce, restaurants and hotels, signaling that domestic demand and consumer activity are still carrying much of the labor market’s momentum. The occupation rate climbed to 70.0% from 69.4%, another sign that more of the working-age population is being absorbed into the economy. For policymakers, the numbers suggest that recent growth is not only showing up in output statistics, but is also translating into employment and a broader social payoff.

Still, the report is not a clean victory lap. Underemployment remained at 4.2%, affecting 143,181 workers, and women accounted for 63.2% of that group. That points to a persistent mismatch between the kind of work being created and the need for longer-hours, better-quality jobs, especially for women who often face greater care burdens and lower labor-force flexibility. The next policy challenge is less about creating any job and more about widening access to full-time formal work.

For investors, the implications are straightforward. A stronger labor market should support consumption, especially in retail, food services and hospitality, and should help underpin credit demand. It also strengthens the case for Paraguay as a relatively stable domestic-growth story in a region where labor markets remain uneven. The risk is that if wage pressures build too quickly or if job creation slows in services, the improvement in unemployment could prove harder to sustain.