Brazil’s unemployment rate falls to 8% despite lowest level of formal job creation

Despite Brazil seeing the lowest level of formal job creation in the first half of the year since the onset of the pandemic in 2020, the country’s unemployment rate exhibited a significant improvement.

According to the Brazilian Institute of Geography and Statistics (IBGE), the unemployment rate dipped to 8% in the second quarter, marking a 0.8 percentage point decrease from the first quarter.

This rate is the lowest for the second quarter since 2014.

The decline corresponds to around 785,000 individuals, reducing the number of unemployed individuals to 8.6 million.

The year-on-year unemployment rate also fell by 1.3 percentage points from 9.3% in the second quarter of 2022.

Over the past year, the number of people seeking jobs fell by 14.2% or about 1.4 million people.

Meanwhile, the underutilization rate, which includes those unemployed, underemployed, or not seeking work despite being able to do so, fell to 17.8% in the second quarter, a decrease of 1 percentage point from the previous quarter and 3.4 percentage points year on year.

The employment data comes from the Continuous National Household Sample Survey.

It indicates that the country’s labor force was approximately 98.9 million, with the employment rate, or the percentage of people employed in the working-age population, estimated at 56.6%.

The number of formally employed individuals in the private sector remained stable at 36.8 million, a 2.8% annual increase, while the number of informal workers rose by 2.4% to 13.1 million.

Despite the quarter-on-quarter increase, the country’s informality rate of 39.2% marked a decline from 40% in the same quarter of the previous year.