Brazil's rising unemployment to help inflation, but not consumption

Seasonally-adjusted series suggests that Brazil's unemployment rate actually bottoming at 4.5% in June 2014 and has risen to 6.0% since then. 

"In May, a 0.2pp increase is expected in the unemployment rate to 6.6% as employment fell by 0.8% yoy and the labour force likely grew by 1.0% yoy", says Societe Generale. 

With the economy in deep recession, the average unemployment rate for this year is expected at 6.2% compared with 4.9% in 2014, and it will likely rise to 7.6% in2016 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", added Societe Generale.

While this will help moderate inflation expectations, it will also likely be a drag to private consumption and growth