Brazil is creating jobs, but industry still lagging

. Jan 23, 2019
Brazil is creating jobs, but industry still lagging

In a sign of economic recovery, Brazil rounded off 2018 with a positive balance of 529,500 new formal jobs, the first good result in four years, according to data from the Ministry of Economy released on Wednesday. The recovery, however, is not evenly distributed across economic sectors.

During the year, services boasted the best performance, creating 398,600 new jobs. The only sector that showed a reduction was public administration, which shrank by 4,100 jobs. However, the processing industry was more or less stagnant, with 2,600 new jobs—a growth of only 0.04 percent. This could be explained by plenty of idle capacity, which poses a challenge to stronger recovery.

</span></p> <p><span style="font-weight: 400;">The data obtained from the General Unemployment Register (Caged) shows that formal job creation has risen in every region last year. The best results were found in the Southeast (251,700 new jobs). The region, which includes São Paulo and Rio de Janeiro, traditionally corresponds to the largest part of Brazilian GDP and was one of the areas worst hit by the recession. </span></p> <p><span style="font-weight: 400;">December&#8217;s numbers showed a decrease of </span><span style="font-weight: 400;">334,400 jobs, reducing the overall result, but it was still </span><span style="font-weight: 400;">the second-best result for that month since 2007. The ministry blamed the fall on seasonality. </span></p> <div class="flourish-embed" data-src="visualisation/205169"></div> <p><script src=""></script></p> <p><span style="font-weight: 400;">“The negative balance was a result of factors such as construction shutdowns due to bad weather, the off-season for farming, school holidays and staff adjustments in the industry after completing end-of-year orders,” </span><a href=""><span style="font-weight: 400;">noted the agency</span></a><span style="font-weight: 400;">. </span></p> <p><span style="font-weight: 400;">On January 31, the Brazilian Institute of Geography and Statistics (IBGE) will publish official unemployment data for 2018. In November, Brazil&#8217;s unemployed population stood at 12.2 million—11.6 percent of the population. Although the number is gradually improving, </span><a href=""><span style="font-weight: 400;">it is still one of the major challenges the Brazilian economy has to face</span></a><span style="font-weight: 400;">.</span></p> <div class="flourish-embed" data-src="visualisation/205181"></div> <p><script src=""></script></p> <h2>Market trends</h2> <p><span style="font-weight: 400;">In a separate set of posts, the Ministry published a study showing that elderly caregivers was the profession that experienced the biggest rise in the country between 2007 and 2017, expanding 547 percent across the period. </span></p> <p><span style="font-weight: 400;">The trend goes along together with the aging of the Brazilian population, which is a </span><a href=""><span style="font-weight: 400;">deep source of concern for the government</span></a><span style="font-weight: 400;"> amid a heated pension reform debate. IBGE predicts that the population will rise until 2047, reaching 233.2 million people. Then, it will fall to 228.3 million in 2060, when 25 percent of Brazilians are expected to be over 65 years old. If confirmed, the country will have to deal with more pensions, but it will also have to adapt its structure and public spending in sectors such as health.

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Natália Scalzaretto

Natália Scalzaretto has worked for companies such as Santander Brasil and Reuters, where she covered news ranging from commodities to technology. Before joining The Brazilian Report, she worked as an editor for Trading News, the information division from the TradersClub investor community.

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