Unemployment drops to 9.1%, and income rises again after two years, says IBGE

The unemployment rate dropped to 9.1% in the quarter ended in July this year, informed the IBGE (Brazilian Institute of Geography and Statistics) this Wednesday (31). It is the lowest index in the historical series since the quarter ended in December 2015, when it was also 9.1%.

The result came slightly above financial market estimates. Analysts consulted by the Bloomberg agency projected 9% in the median. After two years, the usual real income grew again and reached R$ 2,693 in the quarter, said the IBGE.

The number of unemployed, in turn, dropped to 9.9 million in the quarter through July. According to official statistics, the unemployed population gathers those who are out of work and continue to look for new vacancies. Those who do not have a job and are not looking for opportunities are not included in this calculation.

The unemployment rate was 10.5% in the quarter through April, the most recent period in the comparable historical series. At the time, the number of unemployed was 11.3 million.

The rate was already below 10% in the quarter up to June (9.3%), which marked the most recent release from the IBGE. The data are part of the Continuous Pnad (Continuous National Household Sample Survey).

The survey portrays both the formal and informal labor market. That is, they are evaluated from jobs with a formal contract and CNPJ to the popular odd jobs.

According to the IBGE, the number of unemployed reached 15 million at the beginning of 2021, under the effect of the pandemic.

With the advance of vaccination against Covid-19 and the reopening of the economy, there was a process of returning to the job market. Unemployment then began to decline.

The creation of vacancies, however, was marked by the fall in the average income of workers. The rise in inflation is pointed out as one of the issues responsible for the lower income over the last few months.

The loss of purchasing power of Brazilians puts pressure on President Jair Bolsonaro (PL) on the eve of the elections.

To mitigate the damage felt by the electorate, the federal government is betting on an unemployment truce and a boosted stimulus package for the economy. The measures include the expansion of Auxílio Brasil.

Until the first round of the elections, scheduled for October 2nd, there will be another release from Pnad, scheduled for September 30th. The new edition will include data until August.