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