Brazil’s job market continues to beat analysts’ expectations

As in 2023, Brazil’s job market continues to show more resilience than most analysts expected. This happened in January and now again in February, according to new data from the Brazilian Institute of Geography and Statistics (IBGE) and the Labor Ministry. 

Economists say they have several reasons for this misalignment of forecasts, including a possible structural change in the country’s labor market. A direct effect of President Luiz Inácio Lula da Silva’s flagship social program, Bolsa Família, also cannot be ignored.

In the rolling quarter ending in February, the country’s unemployment rate rose slightly to 7.8 percent, up 0.3 percent from the previous rolling quarter ending in November. Meanwhile, the number of employed workers remained stable at 100.2 million.

According to Adriana Beringuy, coordinator of IBGE’s household sample surveys — from which the unemployment data are derived — the increase in the unemployment rate was mainly due to a greater number of people looking for job opportunities, which is to be expected in the first months of the year.

They reached 8.5 million people in February, an increase of 4.1 percent on a quarterly basis and the first increase since April last year. However, the stability in the number of people in work doesn’t mean that the scenario remains unchanged.

Activities related to agriculture, which are operating at a slower pace than 2023, and public administration, which usually lays off temporary workers at this time of year, saw the number of employed people decline. At the same time, those related to transportation increased by 5.1 percent, a movement that began in the previous quarter and continued through February.

Most of the fluctuations occurred among informal workers, as the number of those with formal employment contracts also remained stable at 38 million. This is important because formal jobs provide greater stability and better conditions for income growth.

The average monthly income of the employed (formal and informal) reached BRL 3,110 (USD 621), an increase of 1.1 percent for the quarter and 4.3 percent for the year.

On Wednesday, the Labor Ministry released figures for the formal job market in February. Once again, job openings exceeded market expectations: 306,111 versus an LSEG consensus of around 245,000. As...