Brazil formal job creation in the red in December, but year ends on positive balance

The Brazilian economy lost 431,000 jobs in the formal sector in December, data released by the Labor Ministry on Tuesday shows. In 2022 as a whole, however, Brazil posted positive job creation, with some 2 million formal employment positions being created last year.

The annual figure is 26.6 percent lower than in 2021, when over 2.7 million formal jobs were created.

Brazil ended the year 2022 with a stock of 42.7 million formal jobs. Over the course of the year, there were 22.6 million new hirings (8.1 percent more than in 2021) and 20.6 million dismissals (a 13.4 percent increase on the previous year).

The services sector hires the most people in formal roles (1.17 million last year), followed by retail in a distant second place (350,110), the industrial sector (251,868), construction sector (194,444), and finally agricultural sector (65,062).

December 2022 was the only month of the year in which the creation of formal jobs was in the negative. That month, 1.81 million dismissals exceeded the 1.38 million hirings registered by the Labor Ministry’s Caged employment survey.

“December tends to be a month of bad news [for the formal labor market],” Labor Minister Luiz Marinho told journalists. The country also lost formal jobs in December 2021, although about 30 percent fewer than last year. A recent change in the Caged methodology makes comparisons with earlier years inadequate, experts say.

The numbers released today concern the final month and year of the Jair Bolsonaro administration. Mr. Marinho said that the new government, led by President Luiz Inácio Lula da Silva, is still “trying to understand what is going on with the labor market.”

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