Brazil’s unemployment rate is falling. But not for the “right reasons”

Brazil’s official statistics agency released new unemployment figures for the three-month period ending in May. Much like the formal job market numbers released yesterday by the Labor Ministry, they point to a deterioration in the labor market. 

The headline rate fell just 0.2 points to 8.3 percent, the best for the period since 2015. It is also well below the rate for the same period last year, which was 9.8 percent. 

However, the decline in the quarter ending in April is due more to a continued decline in the number of people looking for work than to a significant increase in the number of employed workers — a phenomenon that the Brazilian Institute of Geography and Statistics is still trying to understand. 

While the labor force was essentially unchanged at 98.4 million, the number of unemployed adults looking for work fell from 9.2 million to 8.9 million — down 1.7 million from a year earlier.

The population outside the labor force, adults who are neither employed nor looking for work, reached 67.1 million, up 0.6 percent from the previous quarter. 

Adriana Beringuy, who coordinates Brazil’s unemployment surveys, says “it was the lower pressure on the labor market that caused the decline in the unemployment rate.” The data could be related to the aging of Brazil’s workforce, but researchers can’t say for sure at this point.

The informality rate also remained stable at 38.9 percent (38.3 million people), slightly lower than the same period in 2022, when this rate reached 40.1 percent.

The public service added 764,000 jobs in the three months to May, with about one-third of this contingent hired by the public education sector. There were also significant gains in employment in transportation, storage, and postal activities (4.2 percent), and in information, communication and financial, real estate, and administrative activities (3.8 percent). 

On the other hand, there was a decrease in the number of persons employed in the agriculture, livestock, forest production, fishing, and aquaculture sectors (-1.9 percent), followed by civil construction, which in the annual comparison showed a drop of 3.7 percent in the number of employed people.

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