Brazil labour market deterioration continues as unemployment rate to hit 7%

While non-seasonally adjusted data shows Brazil unemployment rate falling to 4.3% in December 2014 and rising to 6.9% through June 2015, seasonally-adjusted series suggests the unemployment rate actually bottomed at 4.5% in June 2014 and has risen to 6.4% since then. 

"While one-tick rise is expected in the non-adjusted unemployment rate to 7.0% in July as employment likely fell by -1.3% yoy and the labor force grew by 0.9% yoy,the seasonally-adjusted rate could jump to 6.8%", says Societe Generale. 

With the economy in deep recession, the average unemployment rate this year is now expected to comprehensively exceed the forecast of 6.2% (4.9% in 2014)

"The 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 on private consumption and growth", added Societe Generale.