Brazil’s Unemployment Rate Falls to 7.1%

Brazil's Unemployment Rate Falls to 7.1% A New Low Since 2014

Brazil’s Unemployment Rate Falls to 7.1%: A New Low Since 2014

A Steady Decline in Unemployment

Brazil’s unemployment rate has reached a new low, standing at 7.1% in the quarter ended May 2024, according to the Brazilian Institute of Geography and Statistics (IBGE). This marks the lowest level since 2014, when the rate was 6.6%. The unemployment rate has decreased from 7.8% in the previous rolling quarter ended February 2024 and 8.3% in the same period in 2023.

A Record-Breaking Employed Population

The Unemployment Rate decreased as the employed population hit a record high, according to IBGE. Specifically, 101.3 million people now have jobs. This represents a significant increase from both the previous quarter and last year. Moreover, the growth spans across formal and informal employment sectors. Notably, employees with formal contracts reached an unprecedented 38.3 million. Adriana Beringuy, IBGE’s household survey coordinator, attributes this expansion to both segments. Furthermore, these figures indicate a robust recovery in Brazil’s labor market.

Sectors Driving Job Creation

IBGE data reveals varied employment trends across Brazil’s economic sectors. Public administration and related services saw robust growth, adding 776,000 jobs, a 4.4% increase. In contrast, transportation and associated industries experienced a downturn, shedding 146,000 positions, a 2.5% decline. These divergent patterns underscore the uneven nature of Brazil’s job market. The fluctuations highlight the intricacies of the country’s labor dynamics. Such sector-specific changes demonstrate the nuanced reality of Brazil’s Unemployment Rate. These shifts reflect the complex interplay of economic factors influencing employment across different industries.

Average Income Reaches New High

Brazil’s Unemployment Rate holds steady. Concurrently, workers’ average earnings hit an all-time high. In the quarter ending May, wages climbed to R$3,181. This marks a 5.6% year-over-year increase. The figure sets a new record for this period and is the highest since October 2020. However, Adriana Beringuy urges caution when interpreting these statistics. She notes that 2020’s elevated income levels coincided with widespread job losses. The pandemic’s economic impact disproportionately affected lower-paid and informal workers. Consequently, this skewed the average income data during that period.

Informality Rate Remains Steady

Analysis by IBGE reveals a persistent high informality rate. Specifically, 38.6% of employed individuals work informally, totaling 39.1 million workers. This group includes employees without contracts, employers, and self-employed individuals without a CNPJ. Although the rate remains steady, it still represents a substantial portion of the workforce. Moreover, this high informality rate poses challenges for Brazil’s labor market. Additionally, it underscores the need for policies addressing job security and benefits for informal workers.

Social Security Contribution Reaches Record High

Lastly, the IBGE survey revealed that the country reached a record number of workers contributing to social security, with 66.171 million in the quarter ending in May. This number has been growing steadily since the beginning of 2023, indicating a positive trend in Brazil’s labor market.

In conclusion, Brazil’s unemployment rate has fallen to 7.1%, driven by the growth of the employed population and the expansion of formal and informal employment. The average income has reached a new high, and the number of workers contributing to social security has also broken records. These indicators point to a positive trend in Brazil’s labor market, signaling a hopeful future for the country’s economy.

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