Arquivos Unemployment is down

Rate fell for sixth time and is now at 8.1%

01/20/2023

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/

Between July and September, economy generated 1 million jobs, well below the 3 million in the previous quarter

10/28/2022

Brazil’s labor market ended the third quarter at a still strong pace: the unemployment rate is down and the average income of workers has increased for the first time since the beginning of 2021. Despite the seemingly positive figures, analysts are adopting a cautious tone as they foresee a slowdown in the coming months.

According to data from the Continuous National Household Sample Survey (Pnad Contínua), Brazil’s unemployment rate stood at 8.7% in the September quarter, down 0.2 percentage point compared with the August quarter.

The result was in line with the median of projections collected by Valor, which ranged between 8.6% and 8.8%. In the same period of 2021, the unemployment rate was 12.6%.

This means that the country had 9.5 million unemployed people – people aged 14 or older who looked for a job in the period but could not find one. This is the lowest since the fourth quarter of 2015. The employed population, meanwhile, reached 99.3 million people, a record since records began, in 2012.

The recovery in employment seen since last year has been driven by commerce, services, and public administration, said Adriana Beringuy, the coordinator of labor and income at the Brazilian Institute of Geography and Statistics (IBGE). The latter contributed to one third of the jobs generated in the last quarter – 291,000, up 8.9% year-over-year.

The growth was stronger among those who hold informal jobs in the public sector. In this group, the number reached 3.055 million people, also a record.

“This growth in the public sector may be linked to the move to recover the structure necessary to provide these public goods, health, and education. Besides that, there was growth within the public administration itself,” said Ms. Beringuy, who rejected the possibility of such growth having been influenced by the election.

“I think it’s mainly two forces combined. On the one hand, positions in the public sector are being filled again. On the other hand, many temporary jobs have been created in the last few months, especially for people IBGE hired for the census,” said César Garritano, an economist at Renascença.

Despite the improvement, the country still had 23.4 million underutilized workers in the third quarter. The contingent of informal workers reached 39.145 million in the third quarter. Nevertheless, given that the number of formal jobs was higher, the economy’s informality rate fell to 39.4% in the period.

For the first time since the first quarter of 2021, the average income has increased year-over-year – 2.5%, according to IBGE. Yet, this is largely explained by the cooling of inflation in the period, said Ms. Beringuy.

“We were already seeing gains in nominal income, but not in real terms. And this is now happening,” she said.

Rodolfo Margato — Foto: Claudio Belli/Valor

The heated labor market may continue to support the improvement in workers’ income, said Rodolfo Margato, an economist at XP Investimentos. “We believe that real income will continue on a recovery path in the coming months,” he wrote in a comment to clients, recalling that the indicator remains about 4% below the levels seen at the end of 2019.

Despite the good numbers, there is a slowdown in the cards, said Bruno Imaizumi, an economist at LCA Consultores. He notes that between July and September, the economy generated nearly 1 million jobs, well below the nearly 3 million seen in the previous quarter.

“This deceleration is also starting to become clear when you look at the Caged [General Register of Employed and Unemployed Workers] figures. Formal work will not be able to absorb all the people who joined the informal sector in the pandemic,” he said, pointing out that this was a trend that already appeared before the crisis, but was intensified by it.

That said, Mr. Imaizumi notes that the labor market tends to continue presenting positive results in the coming months. Still, the accommodation, food, and domestic services sectors have a deficit of 500,000 jobs compared to the pre-Covid scenario, he said.

*By Valor — Brasília

Source: Valor International

https://valorinternational.globo.com/

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