Wednesday, January 30th 2013 - 08:52 UTC

Brazilian economy creates the least payroll jobs in 2012 since 2003

The once-booming Brazilian economy created the fewest new jobs in a decade during 2012 as struggling manufacturing industries and mining companies hired fewer workers, according to Labour ministry data. Latinamerica’s leading economy added 1.3 million payroll jobs last year, the worst result since 2003 and way below the 2 million jobs created in 2011.

Unemployment still remains at an almost historic low of 4.9%

Facing lower commodity prices and heated competition from abroad, Brazilian mines, steel mills and makers of goods like shoes and beverages created fewer jobs last year. The service sector, which has been the bright spot of the tepid Brazilian economy, also added fewer jobs last year.

Even as the pace of formal job creation slowed, unemployment remains at a record low in Brazil, a disparity that some economists say is due to the way the data is collected.

The national statistics agency IBGE includes both formal and informal jobs in its calculation of the unemployment rate while the Labour ministry collects data from businesses that have workers legally registered. Informal jobs range from self-employed accountants to small business owners.

Record low unemployment remains a paradox in a country that has experienced two years of painfully slow economic growth. The Brazilian economy grew about 1% in 2012, a far cry from 7.5% in 2010.

Almost full employment and rising wages have helped President Dilma Rousseff remain immensely popular even as she struggles to reignite solid growth with a barrage of tax cuts and cheap credit.

The Labour ministry predicts that Brazil will create more than 2 million new jobs in 2013 as the economy picks up steam.

Economists say strict labour regulation makes it very difficult and costly to fire workers, forcing companies to keep employees on their payroll as they wait for the economy to improve.

Brazil's jobless rate fell more than expected to 4.9% last November and edged closer to an all-time low, an enviable position compared to developed nations hit by global slowdown. In Spain, unemployment hit an all-time high of a 26% in the fourth quarter, leaving 6 million people without a job at the end of last year.

Brazil could still face problems if the slow recovery does not speed up this year. The economy shed a more-then-expected 497,000 jobs in December, compared to 408,172 jobs lost in December of 2011. Companies tend to fire temporary workers in December after increasing production before the Christmas holidays.

8 comments Feed

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1 ChrisR (#) Jan 30th, 2013 - 12:22 pm Report abuse
The clever thing for the near future, when things do improve, is to get the EXISITNG workforce to produce more goods and wealth.

This can be done by increasing production efficiency. Reducing manual input for some form of automation is definitely the way forward. It also improves the type of production worker and makes them more flexible.

But I suppose, looking at the unions, this is nothing short of heresy (if I believed in god, which I do not).
2 Hepatia (#) Jan 30th, 2013 - 04:23 pm Report abuse I think that the day when Europeans can lecture anybody about economics is long gone!
3 ChrisR (#) Jan 30th, 2013 - 06:11 pm Report abuse
@2 Hapatia

Are you stupid by birth or do you work at it?

Would you like to demonstrate why I am incorrect with my post as you seem to 'think'.

I await with bated breath for your missive on this subject.

CLUE: it's not economics.
4 Brasileiro (#) Jan 31st, 2013 - 12:16 am Report abuse
Você realmente acha que o problema é político? Pois eu te digo que não é. O cálculo de desemprego é o mesmo que nos tempos de Fernando Henrique, e o problema era muito maior. 10% da nossa população ativa não tinha fonte de renda, não tinha amparo social, não tinha sonhos ou esperança. Andávamos pelas ruas e víamos um deplorável comércio informal, víamos nossas ruas sujas, trânsito bloqueado para os poucos que tinham carro. Víamos prédios de luxo que adornavam uma paisagem esquálida e pobre. Víamos um povo que fazia qualquer negócio para conseguir, não a dignidade, mas o pão de cada dia. Vendiam suas almas, seus corpos. Vendiam porque não vislumbravam um horizonte, pasme, com pão na mesa.
Então você acha mesmo que aquela política da direita era a mais correta?
Homem, tenha o mínimo de sensibilidade.
Hoje, não só temos o pão na mesa como temos sonhos e esperança. Acredito que as decisões políticas que nosso atual governo está tomando são as melhores possíveis. O Brasil não depende de seu comércio exterior para se posionar bem em sua economia. Nosso comércio exterior é muito pequeno para influenciar nosso crescimento. Além disso, não somos um povo educado o suficiente para concorrermos em pé de igualdade com as nações “ricas” e desenvolvidas. Precisamos antes fazer a tarefa de casa. Não podemos nos abrir para enriquecer algumas empresas e empresários que não tem compromisso com a sociedade e o meio ambiente.
Homem, tenha sensibilidade!
5 Hepatia (#) Jan 31st, 2013 - 12:51 pm Report abuse The question is not whether you are right or wrong or even whether such concepts as right and wrong have any meaning with respect to a “discipline” such as economics. The question is whether Europeans have the credibility or standing to lecture anybody on the subject of economics. The answer is no.

P.S. Are you dyslexic?
6 ChrisR (#) Jan 31st, 2013 - 05:38 pm Report abuse
5 Hepatia

No I am not and if I were what would that have to do with anything.

Dyslexia is not a measure or indication of lack of intellect.

So tell me the answer to my question, and while you are at it WHY you are so stupid.
7 Hepatia (#) Feb 01st, 2013 - 02:33 am Report abuse I asked because you seem to have great difficulty spelling “Hepatia”. However, I see that, with effort, you are able to surmount your infliction.

Unfortunately your new found ability to spell is not such a great attribute as to allow Europeans the credibility and standing to lecture anybody on the subject of economics. Sorry.
8 ChrisR (#) Feb 01st, 2013 - 09:07 pm Report abuse

Did you not realise I ALWAYS cut and paste the tag, so that I get even the screwball AR tags right!

So if I have quoted you incorrectly, it's because YOU typed it incorrectly.


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