MercoPress. South Atlantic News Agency

Brazil: Unemployment reaches 7.9% in Q1

Brazil's government recorded encouraging figures regarding employment under a formal contract

The Continuous National Household Sample Survey (PNAD) released by Brazil's Institute of Geography and Statistics (IBGE) this week showed that 8.6 million people (or 7.9% of the population) were unemployed in South America's largest country in the first quarter of 2024, which represented a 0.5 percentage-point increase from the previous measurement ending in December.

Despite these figures, it was one of the best first quarters ever since 2014 (7.2%) and it even outpaced for the better all previous projections heralding an 8.1% rate. In the same quarter of 2023, the rate was 8.8%. In the first quarter of 2024, there was a 0.8% drop in the employed population, estimated at 100.2 million.

The increase in the unemployment rate was caused by a reduction in employment, in a seasonal movement of the workforce in the first quarter of the year, IBGE's coordinator of Household Surveys Adriana Beringuy explained. The number of people in the labor force (the sum of the employed and unemployed) rose by 1.5% to an estimated 108.8 million. The population outside the labor force totaled 66.9 million, almost unchanged from the previous period.

The percentage of employed people in the working-age population - known as the occupation level - was estimated at 57%, down 0.6 percentage points from the previous quarter. Compared to the same period last year, the increase was 0.9 percentage points.

The study also showed that 3.6 million Brazilians fitted in the so-called “discouraged” group of people who stopped looking for a job after numerous failures while 25.4 million were self-employed and 38.9 were working but without a formal contract, unlike 37.984 million employees who collectively hit an all-time high for comparable quarters, even though the increase represented stability in statistical terms.

“The stability of employment with a formal contract in the private sector, in a quarter with a reduction in employment as a whole, is an important sign of continued gains in the formalization of the employed population,” Beringuy pointed out.

These figures were the result of 244,300 new formal jobs created in March alone, a 25.7% yoy improvement. The Labor Ministry's General Register of Employed and Unemployed reported that 719,000 formal jobs were created in the first quarter of 2024, a 33.9% increase from 2023.

The average entry-level salary stood at R$ 2,081.5 (US$ 406.67) in March this year, which represents a drop from February's R$2,086.75 (US$ 407.7).

The unemployment rate is the percentage of people in the labor force who are unemployed. People of working age (over 14) who are working or looking for work (employed and unemployed) participate in the labor force. In the fourth quarter of 2023, the unemployment rate in Brazil was 7.4%, the lowest since 2014 and a substantial improvement from 2022's 9.6%.

People under State-sponsored welfare programs such as Bolsa Familia or collecting unemployment insurance are not taken into account when measuring unemployment since they fall into different categories (employed, unemployed, or outside the labor force) regardless of their benefits.