Brazil's labor market deterioration continues

Brazil's non-seasonally adjusted data shows the unemployment rate falling to 4.3% in December 2014 and rising to 6.7% through May 2015.

Societe Generale's seasonally-adjusted series, in contrast, suggests the unemployment rate actually bottomed at 4.5% in June 2014 and has risen to 6.3% since then. 

Employment likely fell by 0.9% yoy while the labor force grew by 1.2% yoy, therefore, the bank expects the unemployment rate this year could exceed their forecast of 6.2% (4.9% in 2014). 

"Unemployment rate is expected to rise to 7.6% in 2016 and 8.7% in 2017. The rising unemployment rate should ultimately help cool wage growth to 5.2% this year and 4.1% next year compared with 10.1% in 2014. While this will help moderate inflation expectations, it will also likely be a drag to private consumption and growth", said SocGen in a report on Monday.