Brazil Cuts Unemployment to 6.6%, Lowest Since 2012 on Formal Job Surge

Brazil’s unemployment rate fell to 6.6% in April 2025, marking the lowest level for any April-June quarter since record-keeping began in 2012, according to the Brazilian Institute of Geography and Statistics (IBGE).

This milestone extends a 46-quarter streak of annual declines since July 2021, despite a slight seasonal uptick to 7% earlier in 2025. The labor market added 103.3 million workers, with formal employment driving growth through a 3.8% annual expansion in registered jobs.

Average monthly wages reached R$3,426 – a record high for April quarters – while informal employment dipped to 37.9%, its lowest post-pandemic level.

Analysts attribute this shift to infrastructure projects like São Paulo’s Metro Line 6, which created 9,000 construction jobs, and sustained demand in commerce (+3.7%) and transport (+4.5%).

Agriculture bucked the trend with a 4.3% contraction, reflecting climate disruptions and reduced commodity exports. The industrial sector grew 3.6%, aided by manufacturing investments.

Labor underutilization dropped 10.7% annually to 18 million people, with discouraged workers declining 11.3% to 3.1 million.

Brazil’s Labor Market

“Formal job creation remains the labor market’s backbone,” said IBGE analyst William Kratochwill, noting a 0.8% quarterly rise in registered positions.

Roughly 39.2 million workers remain informal, though their share of the workforce has fallen steadily from 38.7% in 2024. Economists warn of moderating growth as interest rates curb 2025’s projected 2-2.5% GDP expansion.

However, first-quarter wage bills rose 6.6% annually to R$345 billion, signaling enduring consumer spending power. The services sector continues anchoring employment, accounting for 53% of 2024’s 2.2 million new jobs.

This structural tightening benefits Brazil’s fiscal health through higher tax receipts while reducing social program reliance. With 7.7 million officially unemployed – down 10.5% year-over-year – the data suggests a more resilient economy less dependent on volatile sectors.

Market observers now watch for sustainable formalization trends as infrastructure spending offsets slower hiring in seasonal industries.

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