The Brazilian economy added nearly 242,000 jobs in February, defying forecasts. Surveys by Refinitiv, a financial market data and infrastructure company, and Reuters showed that analysts believed Brazil would create only 161,000 formal jobs in the period.
The result was 31 percent below February 2022 levels, and was the worst for the second month of the year since 2020.
The income bracket data shows that despite the positive net result in job creation, Brazil has cut high-paying positions. The numbers suggest, as does the January jobs report, a trend of fewer high-paying positions available. Further evidence of this is the 2.47 percent decrease in entry-level wages.
Part of the reason is that one-third of all new jobs created were on intermittent contracts, which are not continuous but may consist of sporadic intervals of work. These pay less and offer few legal protections, if any.
Just like in January, retail was the only sector where layoffs outpaced hiring. And once again, the services sector, the backbone of the Brazilian economy, stood out, adding 164,200 positions.
Labor Minister Luiz Marinho cited the country’s benchmark interest rates, which he called “insane,” as an obstacle for entrepreneurs to borrow, invest, and create new jobs. “It is no longer possible to fight inflation with just that, and I think that is clear,” he told reporters on Wednesday.
Last week, the Central Bank decided to keep Brazil’s benchmark interest rate at 13.75 percent per year, a more hawkish stance than expected. The wording of the authority’s minutes disclosed yesterday all but confirmed that, as things stand, the bank is more likely to raise interest rates from current levels than to cut them.
The Central Bank added that the government should present a credible new fiscal anchor proposal if it wants to allay fears about Brazil’s fiscal outlook.
On Wednesday Finance Minister Fernando Haddad said he would have a “conclusive” discussion on the issue with Lula’s chief of staff, Rui Costa, and that the new fiscal rule would be made public sometime this week — no date has been set.
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