Brazil Unemployment Keeps Plunging as Economy Strengthens

Some 8.5 million people were out of work in July, the national statistics agency said

Photographer: Paulo Fridman/Bloomberg
By Andrew Rosati
August 31, 2023 | 09:36 AM

Bloomberg — Brazil’s unemployment rate ticked down for a fourth straight month in July, underscoring the resilience of Latin America’s biggest economy in the face of headwinds including double-digit borrowing costs.

Official data released Thursday showed the national unemployment rate declined to 7.9% from a month earlier, matching the median estimate from analysts surveyed by Bloomberg. Some 8.5 million people were out of work, the national statistics agency said.

Brazil's Jobless Rate Dips in July to 7.9% | Some 8.5 million people were out of work
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A robust labor market helped lift the Brazilian economy far above analysts’ more pessimistic expectations from the start of the year. Steep borrowing costs and months of above-target inflation squeezed consumer spending and weighed on growth. Still, gross domestic product is expected to expand as much as 3% in 2023.

What Bloomberg Economics Says

“Brazil’s labor market tightened further in July, new job gains brought the employment level to a record high and, in another win for policymakers, that hasn’t translated into substantial wage pressures. We believe this should allow the central bank to proceed with another 50-basis-point rate cut at its Sept. 20 meeting.”

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Brazil’s national statistics agency will release second-quarter GDP data on Friday.

--With assistance from Giovanna Serafim and Rafael Gayol.