Brazil unemployment rate 12.9%, less than half working-age population in work

BRASILIA (Reuters) - Brazil’s unemployment rate rose to its highest in two years, official figures showed on Tuesday, as the coronavirus-fueled shock to the economy inflicted increasing damage on the labor market.

The 12.9% unemployment rate was slightly lower than the 13.0% economists had expected, but underlying details showed conditions were deteriorating more rapidly and severely than the headline rate would indicate.

For the first time since the data series began in 2012, less than half the people of working age were in work, statistics agency IBGE said. The underemployment rate, number of people out of work and those leaving the workforce all rose to the highest on record, it added.

“Less than half of the working age population is in work. This had never happened before,” said IBGE research analyst Adriana Beringuy.

The headline 12.9% unemployment rate in Latin America’s largest economy in the three months to May was the highest since the three months to April 2018.

Tuesday’s figures from IBGE showed that 85.9 million people were in work, down almost 7.8 million, or 8.3%, from the same period last year, both record declines.

That pushed the labor force participation rate down to a record low 49.5%, with a record 75 million people now out of the workforce. That marks an increase of more than 9 million people, or 13.7%, on the same period last year, IBGE said.

The number of Brazilians officially out of work stands at 12.7 million, and the number of underemployed rose by 3.6 million, or 13.4%, to a record 30.4 million, IBGE said. The underemployment rate jumped to 27.5%, also a record.

The data comes a day after separate figures showed Brazil lost 332,000 formal jobs in May. That was less than half the record 902,000 fall in April, but again details were soft, with real average earnings down 4.35% in a month and total formal jobs shrinking rapidly.

Reporting by Jamie McGeever; Editing by Bernadette Baum