Brazil’s unemployment rate rose slightly to 7.6 percent in the rolling quarter through January, about 0.2 percentage points below market expectations.
The increase was expected, as the end of temporary Christmas jobs usually affects the labor market at the start of the new year. This time, the impact was milder than expected, which analysts say is a sign that the labor market is still resilient. The data was released today by the Brazilian Institute of Geography and Statistics (IBGE).
The number of workers with formal contracts rose 3.1 percent from a year earlier to 37.9 million people, another historic record, according to Adriana Beringuy, an IBGE research coordinator.
Another piece of positive news came with the wage mass, which reached a record of BRL 305.1 billion, 6 percent (or BRL 17.4 billion) above that of January 2023 and once again a record in the IBGE’s historical series. After two years of decline, the average real monthly income of Brazilian workers rose 7.2 percent to BRL 2,979 (USD 603) in 2023.
It was the highest since 2020, when the Covid pandemic skewed income and wage figures. In the quarter that ended in January, there was a further increase of 1.6 percent from the previous quarter, to BRL 3,078.
The average income growth is linked to the country’s labor market generating more formal jobs.
Formal workers accounted for 74 percent of the private sector workforce in the quarter ending in January, a level similar to that in 2023 as a whole and in 2022, when the formal job market recorded the most openings in the country’s history, more than 2.7 million, in the wake of the post-pandemic economic recovery. In 2023, the country opened 1.48 million formal jobs, according to the Labor Ministry.
“This reinforces my perspective that household consumption will improve throughout the year. We will also see the deleveraging of these families that got into debt during the Covid pandemic. With this, I maintain my GDP projection at 2.2 percent for 2024,” says economist and consultant André Perfeito.
Search
