Unemployment rate in Brazil falls to 6.9% in the quarter ending in June, says IBGE

The unemployment rate in Brazil closed the quarter ending in June 2024 at 6.9%. The number represents a drop of 1 percentage point compared to the quarter from January to March 2024, when the rate was 7.9%. This is the lowest unemployment rate for a quarter ending in June since 2014. The data is from the Continuous National Household Sample Survey (PNAD), released by the Brazilian Institute of Geography and Statistics (IBGE).

With this reduction, the unemployed population in the country reached 7.5 million people, reflecting a drop of 12.5% ​​(minus 1.1 million people) compared to the previous quarter and a decrease of 12.8% (also minus 1.1 million people) compared to the same period in 2023. This number represents the lowest contingent of unemployed people since the quarter ending in February 2015.

Adriana Beringuy, Coordinator of Household Sample Surveys at IBGE, highlights the factors that influenced the reduction in unemployment.

“This significant reduction in the number of unemployed people is due to a very significant expansion in the number of workers, which in one quarter saw an increase of 1.6 million more people working, therefore, making the employed population in Brazil today around 102 million people”, he explains.

She also notes that this growth was seen in a variety of activities, both in higher and lower income sectors.

“We have seen expansion in trade, information and communication technology services, basic education in the public sector and services provided to families. This demonstrates a significant spread of improvements in the labor market,” he adds.

Formal labor market

Fernando de Aquino, member of the Economic Policy Commission of Cofecon, believes that research on the labor market in Brazil needs to be evaluated from two perspectives: one is its behavior in recent years and the other is the distance we maintain from developed countries.

“Regarding the performance of recent years, the Continuous PNAD shows us good results, with unemployment falling continuously and the employed population also increasing. However, informality remains very high, indicating a poorer quality labor market, without the guarantees of the CLT. This makes it difficult to finance social security benefits, both current and future,” he highlights.

In relation to developed countries, he states that Brazil still faces low labor income. According to Aquino, the high return on capital, supported by high interest rates, makes people prefer to invest in the financial market rather than in the real sector.

“We need investments that increase labor productivity, enabling fairer wages,” he says.

The formal labor market also shows positive results. The number of employees with formal employment contracts in the private sector (excluding domestic workers) reached 38.38 million, setting a new record in the historical series. In the quarter, this number grew by 1.0% (397 thousand more people) and, in the year, by 4.4% (1.6 million more people). The informal worker segment remained at 38.6% of the employed population, representing 39.3 million informal workers.

Expectations

Economist Cesar Bergo points out that unemployment has been falling, especially in the retail and services sectors. “The trend is for it to improve even further in the coming months, driven by celebratory dates such as Children’s Day and Christmas, in addition to Black Friday. The trend is for this unemployment rate to remain around 7%”, he adds.