Brazil’s Unemployment Rate Experiences Notable Increase In Early 2025

Brazil’s unemployment rate increased to 6.5% in January 2025, the highest in five months, reflecting concerns over inflation and currency weakness. The number of unemployed rose to 7.2 million, while net employment fell by 0.6% to 103 million. Despite this, average real wages grew by 1.4%.

The unemployment rate in Brazil rose sharply to 6.5% for the quarter ending in January 2025, up from 6.2% in the preceding three-month period ending in October 2024. This figure represents the highest unemployment rate observed in five months and is relatively close to market expectations of 6.6%.

The increase in the unemployment rate signifies a departure from Brazil’s previously tight labor market conditions, indicating ongoing concerns over high inflation and a weakened currency that have negatively influenced aggregate demand. The number of unemployed individuals surged by 5.3%, bringing the total to 7.2 million.

Additionally, net employment experienced a decline of 0.6%, resulting in a total of 103 million employed individuals. Concurrently, the population outside the labor force rose to 66.8 million, exacerbating the challenges in the job market. Notably, despite these troubling indicators, average real wages increased by 1.4%, reaching R$3,343 monthly.

In conclusion, Brazil’s unemployment rate has evidenced significant growth, reflecting underlying economic challenges such as high inflation and currency instability. The increase in the unemployed population along with a decrease in net employment underscores the necessity for policy measures to stimulate demand and enhance labor market conditions. Meanwhile, the rise in average wages offers a glimmer of hope amidst these adverse developments.

Original Source: www.tradingview.com