BRASILIA (Reuters) - Brazil’s unemployment rate fell to 11.8% in the three months through July, statistics agency IBGE said on Friday, below market expectations and the lowest this year in another sign that the economy may be slowly turning a corner for the better.
Brazil’s unemployment rate has fallen almost a full percentage point since March, and the news comes a day after figures showed that the economy expanded twice as fast as economists had expected in the second quarter.
“A great day!” President Jair Bolsonaro tweeted, adding, however, that a jobless rate of 11.8% is still high.
But the improvement is gradual, uneven and fragile, some economists say, noting that wage growth remains weak and that job growth is concentrated in the ‘informal’ market rather than companies taking on workers on official, registered contracts.
“People are getting work, but companies aren’t hiring,” said Jose Francisco Goncalves, chief economist at Banco Fator in Sao Paulo.
The unemployment rate in the three months to July fell from 12.0% in the three months to June, below the median forecast in a Reuters poll of 11.9% and the lowest since December.
In the preceding three-month period from February to April, the jobless rate was 12.5%, IBGE said.
The number of Brazilians out of work fell by 609,000 in the period, or by 4.6%, to 12.6 million. That is still a high number, however, which reflects a large amount of slack in the labor market and is little changed from a year ago.
That figure was swelled by some 411,000 people getting jobs in the informal private sector, reflecting the “poor quality” of overall job growth, according to Alberto Ramos at Goldman Sachs.
The underemployment rate, which hit a record 25.0% earlier this year, fell 0.4 percentage points to 24.6%, also little changed from a year earlier, IBGE said.
The number of underemployed workers in Brazil was little changed at 28.1 million, IBGE said. That hit a record 28.5 million earlier this year.
Average household real income fell 1.0% to 2,286 reais ($550) a month from the preceding three months, IBGE said.
Reporting by Jamie McGeever; Editing by Steve Orlofsky