Formal employment slows down and country creates 155,000 formal jobs in January

The country registered the net creation of 155,100 formal jobs in January, which represents a slowdown in relation to the same month last year.

The result was 38% lower than that recorded in January 2021, when the net balance was 254.3 thousand – considering adjustments (that is, data delivered by companies after the deadline).

The balance this month is the result of 1.7 million new hires and 1.6 million dismissals and was disclosed through the Caged (General Register of Employed and Unemployed), presented this Thursday (10) by the Ministry of Labor and Social Security. .

Bruno Dalcolmo, Executive Secretary of Labor and Pensions, said that the slowdown is natural after the positive data recorded amid the 2021 recovery after the height of the Covid-19 crisis and the normalization of data. “This is not something negative, it is part of a movement of economic growth and population occupation. It is natural that the volumes end up being smaller this year, it is something to be celebrated”, he said.

This year, Caged is influenced by the gradual end of the effects of the emergency job maintenance program. Created during the pandemic, the measure was considered essential by experts to sustain the job market during the height of the Covid-19 crisis.

Now, the ministry believes that the end of the program and the end of the protection of employment relationships make the data more dependent on the performance of economic activity.

In January, 853 thousand workers still had the provisional job guarantee granted by the program. The ministry’s estimate is that the number will drop to 715,000 in February, 579,000 in March and 173,000 in April. That is, one less 680 thousand workers protected in the interval of three months.

The month’s data show a closing of 60 thousand jobs in commerce, the only sector with a negative result in the month. The balance reverses the performance of a year ago, when the segment created 10,100 jobs.

According to the Ministry of Labor and Welfare, the closing of vacancies in the sector is partly related to the end of the year-end festivities and partly to the end of the emergency program.

On the other hand, the month was benefited by job creation driven by the service sector (102 thousand jobs), followed by industry (51.4 thousand), construction (36.8 thousand) and agriculture (25 thousand).

In terms of geographic distribution, the five regions created jobs in January and were led by the South (with 58,700 openings). Then came the Southeast (52.6 thousand), Central-West (33.8 thousand), Northeast (5.3 thousand) and North (2.4 thousand).

The average admission salary in the country remains below a year earlier. In January, the indicator was R$ 1,920.59 – a real drop of 1.2% compared to the same month a year ago. Despite this, this is the best level recorded in seven months.

The data was also accompanied by more claims for unemployment insurance. There were 529 thousand applications in January, the highest level in nine months and also 10% above January last year (when the total was 480 thousand).

According to the ministry, the busiest economy produces an increase in both admissions and dismissals – which increases the number of unemployment insurance claims. Workers have 7 to 120 days after the termination date to apply for the benefit.

Analysts expect job creation in 2022, albeit at a lower level than last year (in 2021, Brazil created 2.7 million formal jobs).

Fernando Holanda Barbosa Filho, a researcher at FGV IBRE (Brazilian Institute of Economics at Fundação Getulio Vargas), says that much of the recovery in formal employment last year was a recovery from the pre-pandemic level and from now on, once the pre-crisis levels, the trend is for numbers to stop growing.

“What generates job growth is economic growth, and forecasts this year are not so robust,” he says.

Additional pressure on the labor market will be the war in Ukraine and the consequent effects on higher inflation and lower activity. “Obviously it won’t be positive. We have to know now the magnitude of the effects, such as the impact on inflation, and how permanent they will be,” he says.

Bruno Imaizumi, economist at LCA Consultores, says that the economic reopening continues to boost the numbers, but that the more deteriorated domestic scenario in recent months may be affecting the pace of admissions.

“From 2022, this performance should be more linked to the economic scenario than the sanitary scenario, which has difficulties with inflation and high interest rates, although it can benefit from lesser effects of the Ômicron variant”, he says.

Imaizumi predicts the creation of 895,000 jobs in 2022. “Despite a small positive surprise, the January results do not nullify the hypothesis that the trend of deceleration in job creation should occur for the year 2022”, he says.

Onyx Lorenzoni, Minister of Labor and Social Security, said that the ministry’s projection is to create 1.5 million to 2 million formal jobs in 2022 – which analysts do not see as feasible.

He added that the ministry is preparing a digital microcredit program that will allow the “invisible” to become individual microentrepreneurs, but did not provide details.

As already shown by sheet, the proposal under discussion is to use a microcredit guarantee fund to promote small loans for entrepreneurs and informal workers, and may also include negative ones. The idea is to use between R$ 3 billion and R$ 3.5 billion from the FGTS (Fundo de Garantia do Tempo de Serviço) to contribute to a fund for this purpose.