After a sharp and continuous slowdown that began in mid-2013 and ended in the last quarter of 2015, economic growth in most Latin American countries has now officially returned. But a corresponding decline in unemployment is nowhere in sight. In fact, unemployment in much of the region has continued climbing during the last seven quarters. Why?

There are two explanations.

First, the current recovery is much slower and shallower than previous ones, which means that jobs are not being created as fast and at sufficiently high numbers to keep up with labor market entrants. In fact, average annual growth in Latin America was a meager 1.4% during the first seven quarters of the current recovery, compared to 5.4% following the previous one. The problem with this explanation is that it doesn’t account for the lack of investment.

A second possible answer is what I call the “capacity glut” hypothesis. In the decade before mid-2013, Latin America grew at a breakneck pace — about twice its historic average. Until the boom’s end, consensus forecasts predicted that the bonanza would continue. At the time, this seemed a reasonable assumption. China’s voracious appetite for commodities dramatically altered perceptions about the global economy’s trajectory. But, to paraphrase Mafalda, the iconic protagonist of the Argentine artist Quino’s signature cartoon series, the future is no longer what it was.

Read the full article about the data behind Latin America's jobless recovery by Ernesto Talvi at Brookings.