Unemployment in Brazil Hit 14.4 Percent in Quarter Ended in August

RIO DE JANEIRO, BRAZIL – The unemployment rate hit 14.4 percent in the quarter ended in August, up 1.6 percentage points over the quarter ended in May, when it recorded 12.9 percent. It is the highest rate registered since the National Continuous Household Sample Survey (Continuous PNAD) official records began in 2012.

The number of unemployed reached 13.8 million, an increase of 8.5 percent over the preceding quarter. There are approximately 1.1 million more people looking for a job compared to the quarter that ended in May.

The data were released October 30th, by the Brazilian Institute of Geography and Statistics (IBGE).

According to research analyst Adriana Beringuy, the increase in the unemployment rate is a reflection of the relaxation of social isolation measures to control the Covid-19 pandemic, which led people to look for a job again.

“This increase in the rate is related to the growth in the number of people who were looking for work. By mid-year, there was greater isolation, with tighter restrictions on trade, and many people had stopped looking for work because of this context. Now we perceive greater activity in the labor market compared to the rolling quarter ended in May,” she explained in a note.

According to the survey, the number of occupied people in the country dropped by five percent compared to the quarter ended in May, totaling 81.7 million. “With this 4.3 million retraction, this is the lowest contingent ever recorded in the survey series. When compared to the same quarter last year, there is a 12.8 percent drop, which represents 12 million fewer people in the labor market,” reports IBGE.

According to the researcher, in the preceding quarter there was a loss of jobs and an increase in inactivity, in other words, people lost their jobs, but they were not pressuring the market because of more restrictive social isolation measures.

“The scenario we currently see is the drop in occupation along with the increase in unemployment. People are still being dismissed, but this loss of occupation is being matched by greater market pressure,” said Adriana.

According to the survey, the level of formal occupation stood at 46.8 percent, also the lowest in the series, with a drop of 2.7 percentage points over the preceding quarter, of 49.5 percent, when, for the first time in survey history, the index fell below 50 percent. Over the same period, the number of employees with a signed employment booklet dropped by 6.5 percent, reaching 29.1 million people, the lowest in the series. According to the IBGE, this number represents a contraction of two million people with formal jobs.

The researcher stressed that the loss of employment has occurred in all areas of the labor market, but casual workers were the most impacted in the first months of social isolation measures.

“The loss of occupation among casual workers is lower compared to the quarter ended in May. Among workers with a signed employment booklet, this loss has not decreased in intensity. Casual workers suffer this volatility: they were the first to be impacted and are the first to return to these activities, although with a great loss of jobs,” she explained.

The rate of informality in the quarter ended in August stood at 38 percent, which represents 31 million self-employed workers or those without a signed employment booklet. In the preceding quarter, this percentage stood at 37.6 percent.

Growth in the occupied population was recorded in only one of the ten activity groups in the quarter ended in August. The number of people employed in agriculture, livestock, forestry, fishing, and aquaculture increased by 2.9 percent in the quarter, which represents 228,000 more people working in the sector.

Over the same period, the occupied population in industry fell by 3.9 percent, losing 427,000 workers, while trade, motor vehicle, and motorcycle repairs contracted by 4.7 percent, representing 754,000 fewer people. In construction, the scenario remained stable.

The contingent of the labor force, the sum of occupied and unemployed people, fell by 3.2 percent over the preceding quarter, reaching 95.5 million people. Over the same period, there was an increase of 4.2 million people in the population outside the workforce, which is now estimated at 79.1 million.

According to the IBGE, the potential labor force, which includes people who were neither occupied nor unoccupied, but who had the potential to join the labor force, increased by 14.2 percent, totaling 13.6 million people.

“The potential labor force has been growing progressively because many people who lost their jobs over the past few months did not start pressing the market, but instead became inactive. They claimed they weren’t finding work, either due to local shortages or the impact of the pandemic that prevented this search,” said Adriana.

The number of discouraged people, i.e. those who did not look for a job but who would like to work and were available, increased by eight percent, now totaling 5.9 million, the highest figure ever recorded in the series. There are 440,000 more people in this situation. Compared to the same quarter last year, there was a 24,2 percent increase, when there were 4.7 million discouraged people.

Source: Agência Brasil