SÃO PAULO: Brazil’s unemployment rate increased in the June-to-August period, affecting 12 million people, while wages continued to decline amid a persistent recession in Latin America’s largest economy. Joblessness rose to 11.8% from 11.2% in the previous three-month period and from 8.7% a year earlier, the Brazilian Institute of Geography and Statistics, or IBGE, said Friday.
With this level, Brazil, with a population exceeding 206 million people, ended the June-to-August period with a total of 12 million unemployed people, compared with 11.4 million in the prior three-month period and 8.8 million in the year-ago one. According to IBGE, Brazil’s labor force, including unemployed people, totals 102.2 million people.
Average monthly wages fell to 2,011 Brazilian reais ($618), adjusted for inflation, from 2,047 reais in the year-ago period; monthly wages were down from 2,015 reais in the prior three-month period. The drop in jobs and wages comes as the effects of the country’s deep recession hurt companies’ cash flow. After contracting 3.8% last year, Brazil’s economy is expected to shrink 3.15% this year, according to a weekly central bank survey of 100 economists. Despite early signs that economic recession is moderating, Brazil’s labor market is likely to deteriorate even further in the coming months.
“We expect the labor market to deteriorate further given the forecasted weak performance of the economy, particularly of the labor-intensive services sector,” said Alberto Ramos, an economist at Goldman Sachs. Friday’s data came from a survey created last year by the IBGE that measures nationwide unemployment and is known as PNAD. It replaced a survey that collected data from only six major metropolitan areas.