Colombia Two-speed labor market: National tight, urban with early softening signals

Research evidence excerpt

Colombia Two-speed labor market: National tight, urban with early softening signals

J P M O R G A N Latin America Economic Research

01 July 2026

Colombia

Two-speed labor market: National tight, urban with early

softening signals

Emerging Markets Economic and

Policy Research

Juan Goldin

(57 601) 869 8746

juan.goldin@jpmchase.com

BANCO J.P. MORGAN COLOMBIA S.A

• Labor market indicators remain tight, but early stress signals are emerging— Diego W. Pereira

most visibly in urban areas

(1-212) 834-4321

• National employment momentum remains positive despite the minimum- diego.w.pereira@jpmorgan.com

wage shock, while urban employment momentum has stalled J.P. Morgan Securities LLC

• The number of unemployed is contracting in momentum terms at the national

level, but remains firmly positive in urban areas

• National unemployment has reached new record lows; urban unemployment

remains close to record lows too—helped by weaker urban participation

• Wage pass‑through remains visible: our proxy shows real wages up 5.95%oya,

sa, in the last-three-month average

In yesterday’s statement, the BanRep highlighted a tight labor market as one reason

for the higher-than-expected 75bp hike (see note). We were also surprised by the

labor market strength, particularly at the national level. Indeed, labor market

indicators remain tight—showing resilience despite the unprecedented minimum

wage increase—although early signs of stress appear to be emerging, particularly

in urban areas. Nationally, unemployment fell to new record lows and employment

creation momentum has re-accelerated after cooling in 1Q. The urban labor

market, however, is where the first signs of the minimum-wage shock look most

visible: urban unemployment remains close to record lows but has edged higher