Brazil’s jobless rate likely to have increased in May

Brazil’s jobless rate is expected to have increased in May. According to a Societe Generale’s research note, the IBGE’s PNAD survey is expected to indicate that the jobless rate grew to 11.4 percent in May from April’s 11.2 percent and slightly less than 9 percent at the beginning of 2016. The Brazilian jobless rate had hit 6.2 percent at the end of 2013 and 6.5 percent at the end of 2014 before worsening to current levels.

In spite of its different level, the PME survey also indicates that the jobless rate has increased almost by two-folds from its level at the end of 2014. The new survey indicates that Brazil’s unemployment is declining at an annual rate of 1.5 percent in the past three months.

The weakness in the Brazil’s labor market is consistent with projections given that the economy continues to be in deep recession and that the business sentiment is low. Worsening of the labor market might be a serious challenge to the outlook of investment and consumption demand. Growth in investment is likely to bottom in 2017; however, consumption will keep the Brazilian economy from expanding, according to Societe Generale. The labor market is likely to keep deteriorating in the next few years.