Unemployment goes to 11.2%, the lowest since 2016, but income is the lowest in the series

The unemployment rate dropped to 11.2% in the quarter from November to January, informed this Friday (18) the IBGE (Brazilian Institute of Geography and Statistics). It is the lowest mark for the period since the beginning of 2016, when it was 9.6%.

The fall in unemployment was accompanied by a new drop in the average income from work. The usual real income was estimated at R$ 2,489. This is the lowest value for comparable quarters in the historical series, which began in 2012, says the IBGE.

The reduction in income was 1.1% compared to the immediately previous quarter, from August to October 2021 (R$ 2,518). In comparison with the quarter of a year earlier, between November 2020 and January 2021 (R$ 2,755), the decrease reached 9.7%.

According to the IBGE, none of the surveyed job categories showed an increase in income. In industry, for example, there was a drop of 4.1%, even with an increase in employment with formal jobs.

“The decline in income, which is usually associated with the informal worker, was disseminated to other forms of insertion and not only those related to informality”, said the coordinator of Work and Income at IBGE, Adriana Beringuy.

“Although there is expansion of occupation and more people working, this is not reverting to growth in the income of workers in general,” he added.

The unemployment rate came in slightly below financial market expectations. Analysts consulted by the Bloomberg agency projected a rate of 11.3%.

According to the IBGE, the unemployed population dropped to 12 million in the quarter through January. According to official statistics, a person is unemployed when he/she has no job and continues to look for opportunities.

In the immediately preceding quarter (August to October), the unemployment rate was 12.1%. At the time, the unemployed population was estimated at 12.9 million.

​The data are part of the Pnad Contínua (Continuous National Household Sample Survey). The survey includes both the formal labor market, with a formal contract or CNPJ, and the informal labor market, without these records.

Due to the economic crisis generated by the pandemic, unemployment gained strength in Brazil. At the beginning of last year, the number of unemployed reached the barrier of 15 million, according to Pnad Contínua.

After the resumption of economic activities and the return of informal workers to the market, the indicator began to decline.

The opening of vacancies, however, has been accompanied by lower income. Rising inflation and the creation of lower-wage jobs help explain leaner income, economists say.

In the 2022 scenario, projections indicate that the resumption of the labor market should lose steam. According to analysts, this tends to occur due to the weak performance expected for economic activity this year, which would impact the demand for labor.