The natural resources sector reduced its annual growth rate by more than two points compared with the previous quarter, primarily related to lower mine production early in the quarter, but also to the significant drop in fishery. Sectors other than natural resources performed below trend in the second quarter. Growth was mainly driven by trade and construction, while other areas linked to investment slowed. Installed capacity utilization has declined accordingly. Domestic demand slowed down further in the second quarter. Final demand, however, which excludes inventories, continued to grow at the same pace of the first quarter. Gross fixed capital formation posted y-o-y expansion flat from the first quarter of this year, but below the figures of the second half of 2012. As has been noted before, this slowdown owes mainly to the maturing of mining investments after three years largely outperforming GDP. Also in an external context where the copper price has dropped and moderating expectations for growth around the world but especially in China, which call for more caution when evaluating investment decisions. On the other hand, private consumption was more dynamic, especially in its non-durable component, while durables remained high. Labor market conditions have continued to tighten, but are still the main driver of this component. Nominal and real wages have moderated their annual variation, while the unemployment rate remains near all-time lows. Again, unlike previous cycles, credit growth has accompanied private income, but has not been the main determinant of household spending.
As a country we have worked for years in strengthening a solid institutional framework with an economic policy scheme based on inflation targeting and a floating exchange rate, with a fiscal rule, a well regulated and supervised financial system, and trade and financial openness. As we have said on other occasions, our scheme of inflation targeting and floating exchange rate allows us to better cope with fluctuations in international markets. The float facilitates early and flexible adjustment of relative prices to changes in the external environment and prevents distortions in the decisions on external financing and exchange-rate hedging of companies and financial institutions in Chile. The recent depreciation of the peso is going in the right direction to help the economy to adjust. Furthermore, the credibility of the inflation targeting framework grants flexibility to the central bank to make changes to the monetary policy and the cost of credit if so required by the macroeconomic scenario, along with allowing adjustments to the nominal and real exchange rate. In order for us to grasp these benefits in times of shortage, we need to act consistently in times of abundance. We have often been confronted with social pressures to intervene the exchange rate market or lower the interest rate to prevent an appreciation of the peso, following the example of countries that are more active in this field.