Brazil's labor market deterioration likely to continue

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

Societe Generale's seasonally-adjusted series suggests the unemployment rate actually bottomed at 4.5% in June 2014 and has risen to 6.3% since then. In June, the bank expects a one-tick rise in both these indicators (the unemployment rate to 6.8% and the seasonally-adjusted rate to 6.4%) as employment likely fell by 0.9% yoy while the labour force grew by 1.2% yoy. With the economy in deep recession, the average unemployment rate this year could exceed our forecast of 6.2% (4.9% in 2014). 

Societe Generale estimates, "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."