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Brazil's July unemployment up for a seventh straight month

Friday, August 21st 2015 - 06:57 UTC
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Unemployment has risen without interruption from a record low of 4.3% in December, pushed up by hundreds of thousands of layoffs in manufacturing Unemployment has risen without interruption from a record low of 4.3% in December, pushed up by hundreds of thousands of layoffs in manufacturing
Itau's CEO Roberto Setubal said the proportion of the bank's loans that were more than 90 days overdue was at 3.3% in the 2Q, up from 3% in 1Q. Itau's CEO Roberto Setubal said the proportion of the bank's loans that were more than 90 days overdue was at 3.3% in the 2Q, up from 3% in 1Q.

Brazil's unemployment rate rose for a seventh straight month in July to the highest in over five years, government data showed on Thursday. The non-seasonally adjusted jobless rate rose in July to 7.5% from 6.9% in June, statistics agency IBGE said.

 Unemployment has risen without interruption from a record low of 4.3% in December, pushed up by hundreds of thousands of layoffs in the manufacturing and service sectors amid higher taxes and interest rates.

The number of Brazilians with jobs in the six major metropolitan areas surveyed by IBGE was nearly unchanged from July 2014 at 22.8 million. The tally of people who unsuccessfully looked for work, however, jumped 56% from the same month a year earlier to 1.8 million.

Wages increased slightly in July, though not by enough to offset the losses caused by steadily rising inflation, currently at 9.56% on a trailing 12-month basis. Salaries discounted for inflation gained 0.32% from June to 2,170.70 Reais ($620). They fell 2.39% from July 2014.

Brazil's economy is expected to shrink 2.01% in 2015 and 0.15% in 2016 as President Dilma Rousseff's government cuts spending and raises taxes to shore up public finances, according to a central bank poll published on Monday.

Mounting job losses have dragged down Rousseff's popularity to a record low of 8%, according to recent polls, while majorities favor her impeachment.

In related news Brazil's largest financial group, Itau-Unibanco Holding said on Thursday it is expecting an increase in the nonperforming loan rate, mainly from the deterioration of the country’s labor market.

“Despite the expected increase in nonperforming loan rates, I don’t see this reaching a worrisome level since we have good risk controls,” the group's CEO Roberto Setubal said in a presentation to investors and analysts.

The proportion of Itau’s loans that were more than 90 days overdue was at 3.3% in the second quarter, up from 3% in the first.

The bank is adjusting to the challenging economic situation by focusing on cutting costs, Mr. Setubal said. The bank’s total expenses reached 17.8 billion reais ($5.1 billion) in the first half, an increase of 4.5% from a year earlier and slower than the inflation rate, which is currently above 9%.

Categories: Economy, Politics, Brazil.

Top Comments

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  • ChrisR

    Inflation measured on a 'trailing 12 month basis'.

    That's the way to do it! Ignore the climbing effect of previous year on year inflation even though you will eventually end up like the argies: arsewipe Real and no hope.

    Aug 21st, 2015 - 01:34 pm 0
  • Jack Bauer

    Unemployment will soon be higher than what's left of Dilma's 8% popularity.
    And the index doesn't even consider those who have given up looking for a job, and far less those that sponge off the taxpayer, or, the recipients of the 'bolsa família', currently calculated at 15 million families and growing, or 30,000,000 people of working age. A true unemployment figure is far closer to 23% of the population......the government can do what they want to disguise the real situation, but they can't hide its effects.

    Aug 21st, 2015 - 06:16 pm 0
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