Unemployment drops to 9.3% and reaches 10.1 million in Brazil – 07/29/2022 – Market

The unemployment rate in Brazil dropped to 9.3% in the second quarter of 2022, informed this Friday (29) the IBGE (Brazilian Institute of Geography and Statistics).

It is the lowest level for the period since 2015. At the time, the indicator was at 8.4%, and the economy was going through recession.

The new result was in line with financial market projections. Analysts consulted by the Bloomberg agency projected a median of 9.3%.

The unemployment rate was 11.1% in the first quarter, the most recent period in the comparable series. In the moving quarter from March to May of this year, the indicator had already been below 10%, estimated at 9.8%.

The number of unemployed, in turn, fell to 10.1 million from April to June. The contingent was at 11.9 million in the initial three months of 2022.

According to official statistics, the unemployed population gathers those who are out of work and continue to look for new vacancies. Those who do not have a job and are not looking for opportunities are not included in this calculation.

“The retraction of the unemployment rate in the second quarter follows a movement already observed in other years”, stated Adriana Beringuy, coordinator of surveys by sample of households at the IBGE.

“In 2022, however, the sharpest drop in this rate was caused by the significant advance of the employed population in relation to the first quarter”, he indicated.

The number of people employed with some type of work reached 98.3 million by June. It is the highest level in the historical series, which began in 2012.

There was an increase of 3.1% (3 million more people) compared to the previous quarter and 9.9% (8.9 million more) compared to the same period in 2021.

According to Beringuy, the expansion may still be associated with the reopening of economic activities that had the demand for goods and services repressed by the pandemic.

Pressured on the eve of the elections, the Jair Bolsonaro (PL) government is also trying to stimulate the economy by releasing additional resources.

Asked if this has already caused reflexes in the job market, Beringuy said that actions of the type tend to manifest themselves more in consumption indicators and that it is necessary to wait to measure any effects.

The data released by the IBGE this Friday are part of the Pnad Contínua (Continuous National Household Sample Survey).

The survey portrays both the formal and informal labor market. That is, they are evaluated from jobs with a formal contract and CNPJ to the popular odd jobs.

Income drops 5.1% in one year

Even with the truce of unemployment, the average income of Brazilians still shows signs of fragility. In the second quarter, the usual income from work was estimated at R$ 2,652.

It is the lowest value for this period in the historical series, which began in 2012. In comparison with the second quarter of 2021, there was a decrease of 5.1%. At the time, the average income was R$2,794.

The new value represents relative stability compared to the three immediately previous months (R$ 2,625), according to the IBGE.

According to the institute, inflationary pressure is behind the results. A sign of this is that, in nominal terms, that is, without adjusting for inflation, income grew by around 6% in one year.

The mass of earnings, which is the sum of salaries, reached R$ 255.7 billion in the second quarter. This means an increase of 4.4% compared to the previous quarter and 4.8% compared to the same period last year.

The fact that the country has more people in the market explains the advance. “Although there is no increase in the average income of workers, there was an increase in the mass because the number of people working is quite high,” said Beringuy.

Informal population hits record

The number of informal workers rose to 39.3 million and also reached the highest level in the historical series. The records of this indicator started later, in the fourth quarter of 2015.

Compared to the first quarter, there was a growth of 2.8%, which represents more than 1.1 million people without some type of registration.

This population includes workers without a formal contract, employers and self-employed workers without CNPJ, in addition to auxiliary family workers.

The addition of 1.1 million informal workers corresponded to around 36.2% of the total of 3 million Brazilians who joined the employed population between the first and second quarters.

The share, however, has been larger recently, pondered Beringuy. When touching on this point, the researcher also highlighted the rise in the formal job market.

In this segment, the biggest advance in absolute terms was that of employees with a formal contract in the private sector.

The category reached 35.8 million, up 2.6% in the quarter, equivalent to an increase of 908 thousand people. In the annual comparison, the increase was 3.7 million (11.5%).

The formal employment, however, is still 5.3% below the highest level of the series, verified in the second quarter of 2014 (37.8 million).

According to Pnad, the number of unemployed reached 15 million at the beginning of 2021, as a result of the health crisis.

The truce came then, with the advance of vaccination against Covid-19. However, according to analysts, the recovery of the labor market faces risks in the scenario.

“The numbers released today [sexta] confirm our expectation of a positive first semester in terms of job creation”, said in a report the economist Claudia Moreno, from C6 Bank.

“From now on, we believe that unemployment will continue to fall until the end of the year, closing 2022 with a rate of 8.7%, and will rise again next year, due to the greater impact of high interest rates and the expectation of global slowdown.”​

About Abhishek Pratap

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