Rate fell for sixth time and is now at 8.1%

01/20/2023

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Job creation was more modest, suggesting a slower start of 2023 — Foto: Marcelo Camargo/ABr

The good performance of the labor market in 2022 showed signs of exhaustion again in November, but it remains heated. In line with other signs of deceleration seen in the economy in the final stretch of last year, job creation was more modest, suggesting a more cautious start of 2023 for Brazilian workers.

According to the Continuous National Household Sample Survey (Pnad), released on Thursday by the statistics agency IBGE, the unemployment rate in the country was 8.1% in the moving quarter ended in November 2022, compared to 8.9% in the previous quarter ended in August.

The result was in line with the median expectations of 27 consulting and financial institutions consulted by Valor Data, which pointed to a rate of 8.1% in the moving quarter that ended in November 2022. It is the sixth consecutive quarter of decline in the rate, which reached the lowest level since April 2015 (8.1%).

In absolute numbers, the country had 8.7 million unemployed — people aged 14 or older who looked for a job but couldn’t find one. This is 3.7 million fewer people than in the same period in 2021. The employed population reached 99.7 million people, a new record in the survey, which began in 2012.

Despite the apparent good numbers, the improvement seems to be losing steam. The rate of expansion of the employed population, which was 2.4% and 1.5% in the previous two quarters, slowed to 0.7% in the survey period. According to the seasonally adjusted calculations of banks and consulting firms, it is already possible to see a drop in the employed population.

According to Bruno Imaizumi, an economist at LCA Consultores, the employed population has had a net negative variation for three months. This effect has not yet impacted the unemployment rate only because the labor force participation rate —including those looking for work — has also fallen again.

“If we used the labor force participation rate of the pre-pandemic period, of 2019, this unemployment rate would be 2 percentage points higher than the current number,” notes the economist, for whom the unemployment rate is expected to rise again in the first quarter of 2023.

In Santander’s seasonally adjusted calculations, there was a 0.4% drop in the labor force in November, followed by a retreat of the same magnitude in the employed population. As a result, the bank’s seasonally adjusted unemployment rate ended stable at 8.6% in November versus October.

“The result of the Pnad continues to show an overheated labor market. However, unemployment remains at low levels because of the reduction in labor force participation,” says Santander’s report, signed by Gabriel Couto. “We expect a slowdown in this improvement, but the maintenance of a low market participation rate means a downside risk to our projections.”

Coordinator of IBGE’s Household Sample Surveys, Adriana Beringuy, ponders that it is necessary to wait to better evaluate the loss of breath of job creation. Occupation also comes from successive growths. “Maintaining a high level is difficult,” she said, recalling that 2022 was a year of adjustment, especially in the services sector.

A point celebrated by Ms. Beringuy was the growth in the average income of workers, which rose 3% in the November quarter, to R$ 2,787. With this, the real income bill customarily received by occupied people was R$272.998 billion in the moving quarter ended in November, up 3.8% compared to the previous moving quarter.

In the year-on-year comparison, the average income of the Brazilian worker advanced by 7.1% in the quarter ended in November 2022, which was the first increase after six quarters of decline.

Contributing to this improvement was the growth in the formal sector, which reached 36.8 million, up 2.3% from the previous quarter. On the other hand, the informally employed population fell by 1.3%. Besides the improvement in the occupational composition, Ms. Beringuy also cites the easing of inflation in 2022, compared to the same period in 2022, to explain this first reaction of income in the year-on-year comparison.

Rodolpho Tobler, a researcher at the Brazilian Institute of Economics of Fundação Getulio Vargas (FGV Ibre), points out that, despite all the improvement in the market, the average usual income has not yet returned to pre-pandemic levels.

“It is natural that, when many people stay out of the labor market, the return happens with lower salaries. But this challenge remains for 2023, and the point that worries us is that this year tends to be a more difficult one. The economy was already showing signs of slowing down at the end of last year, and the labor market, with some lag, may notice this as well,” he said.

*By Marcelo Osakabe, Lucianne Carneiro — São Paulo, Rio de Janeiro

Source: Valor International

https://valorinternational.globo.com/