Brazil’s employed population breaks new record

The Brazilian unemployment rate has remained stable in the moving quarter through April at 7.5 percent — slightly lower than the 7.6 percent measured in the previous rolling quarter. 

Adriana Beringuy, coordinator of household sample surveys at the Brazilian Institute of Geography and Statistics, says the April figures show “a stabilization of unemployment,” mainly driven by reduced job losses in the retail sector and more people employed in public education. It is the lowest unemployment rate recorded in a quarter ending in April since 2014.

The unemployed population, that is, those who were not working and were looking for a job, stood at 8.2 million in April. On the other hand, the number of working people reached a new historical record of 100.8 million. 

The number of workers in formal and informal employment reached record levels of 38.2 million and 13.5 million people, respectively. The private sector contributed the most to the growth of the employed population in the country, with a 4 percent growth compared to 2023. This is important because formal jobs provide greater stability and better conditions for income growth.

As we have already explained, the consistent creation of formal job vacancies occurring since 2022, in the wake of the post-pandemic recovery, has surprised economists. Month after month, official data has been better than market projections. LSEG consensus for April, for example, pointed to a 7.7 percent unemployment rate. 

It is not yet confirmed, but economists are considering that Brazil’s natural employment rate might have structurally changed, following the delayed effects of the labor reform implemented in 2017 and the direct influence of President Luiz Inácio Lula da Silva’s flagship income transfer program, Bolsa Família — the program may contribute to the decline of the labor force participation rate, affecting the unemployment rate. 

For the same number of employed people, a declining participation rate “artificially” lowers the unemployment rate, leading people to believe that the labor market is better than it is.

The average monthly income of the employed (formal and informal) population has continued to grow, reaching BRL 3,151 (USD 611) in April, a bump of 4.7 percent for the year. 

As a result, the income mass — the sum of the earnings of all workers in the country — reached BRL 313.1 billion, another record, up by 7.9 percent from a year prior. “This increase in wages has been fundamental to maintaining the expansion of family consumption,” investment firm Suno Research wrote in a report.

The Labor Ministry has also just released April data for the formal market. As already occurred in March, there was a rebound in retail hiring, which created more than 27,000 positions in April. 

Together with the new jobs created by the service sector (138,309) and civil construction (31,893), this result points to an improvement in the population’s consumption level, an essential drive of the Brazilian economy. In the first four months of 2024, the country has created 958,425 formal jobs, up 33.4 percent from a year ago.

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