The Brazilian unemployment rate dropped to 9.8 percent in the quarter ending in May 2022. This is the first time since January 2016 that it is below 10 percent.
The number of unemployed workers dropped from 15.2 million to 10.6 million between May 2021 and twelve months later. Meanwhile, 97.5 million Brazilians are working — the highest amount since records began in 2012.
“With the improvement in the pandemic outlook, governments are lifting Covid restrictions. That has led to a vigorous recovery of the services sector,” said Adriana Beringuy, survey coordinator at Brazil’s official statistics agency IBGE. Best-performing segments of the economy were dining and hospitality, domestic services, and transportation.
While there are many positive aspects to today’s unemployment report, such as an 8-percent quarterly reduction in discouraged workers (those who gave up on job seeking), there are many red flags.
Informal labor rates remain sky-high at 40.1 percent, and underemployed workers amount to 21.8 percent of the workforce. Additionally, data from Brazil’s Labor Ministry shows the nation is creating more jobs that pay less.
The perspective of low growth of the Brazilian economy in a scenario of high inflation as well as an ongoing process of monetary tightening, which impacts access to credit and lower consumption, limits labor market improvements.
The Central Bank on Thursday officially admitted that the year-end inflation would not fall within the 2-to-5-percent target. Instead, it will be the second year prices will rise above government targets.