Analysis: Unemployment in Brazil falls for 9th month in a row, strengthening Bolsonaro’s position

RIO DE JANEIRO, BRAZIL – As reported a couple of days ago, Brazil’s unemployment rate in the first months of 2022 fell to its lowest level since 2016, reaching 10.5%. It has returned to the level of the Dilma Rousseff (PT) government.

The figure surprised financial market analysts and gave a boost to the pre-campaign of Jair Bolsonaro, who is struggling in defense of his economic policies.

Figures compiled by Poder360 show that the unemployment rate has fallen for nine consecutive months. The total number of unemployed in the country (11.3 million) decreased by 25.3% during the year.

This means 3.8 million fewer unemployed people who have stopped looking for work because they have found employment, either a job or a degree.

Currently, 96.5 million people are employed, meaning they are working or doing other activities. The percentage has increased for 12 consecutive months. It reaches an annual high of 10.3%.

The IBGE (Brazilian Institute of Geography and Statistics) released the data on Tuesday (31). Here is the full report.

However, the gradual improvement in the labor market is accompanied by a decline in the population’s income due to the increase in consumer prices.

The worker’s income remained stable at R$2,569 (about US$535) this quarter compared to the previous one (from November 2021 to January 2022). Compared to the same period last year, it decreased by 7.9%. The historical minimum is December 2021 (R$ 2,541).

For economist Bruno Imaizumi of LCA Consultores, the April unemployment result was “a real surprise,” given the increase in the number of people in the labor force, both formally employed and informally employed.

“The problem is that today’s unemployment rate doesn’t tell the whole story of the labor market because there are 3 million more people not in the labor force than in the pre-pandemic period. Since these people are not looking for work and do not register in the unemployment statistics, they are not included in the unemployment rate,” he said.

In other words, the country may have lower unemployment rates than before the crises (pandemic and recession in 2015-2016).

“This will not necessarily lead to an improvement in the labor market, as incomes are now at a minimum level and the share of informal activities in the labor market is increasing,” Imaizumi said.

Currently, 65 million people are outside the labor market.

UNEMPLOYMENT AND ELECTIONS

Unemployment has increased with each president: in the government of Fernando Henrique Cardoso, in the first term of Luiz Inácio Lula da Silva, in the second term of Dilma, and under Temer.

Only in Lula’s second term (2006-2010) and in Dilma’s first term (2011-2014) did unemployment decline at the beginning of a government three months before elections.

The percentage of unemployed is expected to decrease again with President Jair Bolsonaro (PL). In July of this year, the month before the start of the election campaign, the rate should be lower than that of December 2018 (11.7%).

With information from Poder360