Ômicron and flu should reduce employment in the service sector, points out FGV

The Antecedente Employment Indicator in Brazil started 2022 with a drop for the third consecutive month, going to the lowest level in almost a year and a half in January, indicating difficulty in recovery, informed the FGV (Fundação Getulio Vargas) this Monday (7).

The IAEmp, which anticipates the direction of the labor market in Brazil, dropped 5.3 points in January to 76.5 points, returning to the lowest level since August 2020 (74.8 points).

“The sharpest worsening at the beginning of 2022 stems from the combination of the economic slowdown that started in the fourth quarter with the outbreak of omicron and influenza, which mainly affects the service sector, the largest employer, making in the short term difficult to envision a change in the course of the indicator”, said Rodolpho Tobler, economist at FGV Ibre, in a note.

Among the components of the IAEmp, all had a negative contribution to the result of January, being the highlight of the indicator of Current Situation of Businesses of Industry, which contributed with -1.6 points in the change of the general index in the month.

The unemployment rate in Brazil fell again in the quarter ended in November, going to the lowest level since the beginning of 2020 of 11.6%, according to IBGE data. However, the real income of workers reached the lowest of the historical series.