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Brazil – Labour market expected to deteriorate

19 March 2013

Labour market conditions in Brazil are expected to worsen in the coming months despite unemployment falling to a record-low last year.  The jobless rate in 2012 fell to 5.5%, down from 6.0% a year ago, as more companies retained workers and wages overall increased.

But an employment indicator by the higher education institute Fundação Getulio Vargas (FGV) showed that employment sentiments fell in February by -0.3%. This number is derived at by interviewing entrepreneurs in the industrial, services and consumer sectors. Companies now project labour market conditions to deteriorate in the months ahead with firms to hire fewer people.

According to FGV, sentiments are particularly low in the services sector which contributed to the largest fall in employment expectations. The indicator, which also measures the satisfaction of companies regarding current business trading, showed that business sentiments also contracted.

Recent data showed that Brazil gained 28,900 new jobs in January, mainly in the industrial sector, with job creation slowing in a number of industries.

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