More than 1.7 million Brazilians have lost their jobs over the last 12 months, according to Labor Ministry data, taking the total unemployed population to an estimated 11.8 million.

Wages discounted for inflation fell 3.0% from the same months in 2015 to an average of 1,985.00 reais (US$ 615.08).

The fall from grace of what was considered a vibrant emerging market until a few years ago cost Brazil its investment grade rating and contributed to destabilizing President Dilma Rousseff’s government.

The suspended president was removed from office by the Senate on charges of doctoring budget numbers.

GDP Down

Brazil’s Gross Domestic Product (GDP) closed out the second quarter of 2016 0.6% down from the previous quarter in the seasonally adjusted series, totaling US$ 461.18 billion.

Compared to the second quarter of 2015, the GDP shrank 3.8%. With the latest result, the cumulative GDP in the first six months of the year was down 4.6% as against the first six months of 2015.

The cumulative result for the four-quarter period ending in the second quarter of 2016 was down 4.9% from the comparable period a year before.

The Quarterly National Accounts survey was published by the Brazilian Institute of Geography and Statistics (IBGE).

Growth Forecast

The signs of economic recovery led the Brazilian government to increase the growth forecast for next year. Brazil’s GDP growth estimates increased from 1.2% to 1.6% for 2017, announced Finance Ministry Secretary for Economic Policies, Carlos Hamilton Araújo.

The official inflation forecast by the Broad National Consumer Price Index (IPCA) was kept at 4.8%. The numbers will be used to prepare the 2017 Annual Budget just submitted to Congress.

According to the secretary, the government will only release the effect of the increased economic growth on federal revenues when the bill is sent. If revenues rise more than expected, the government will not have to increase taxes to raise next year’s funds and meet the primary deficit target of US$ 43 billion in 2017.

According to Araújo, the country should report economic growth again in this year’s fourth quarter.

“In real terms, the industrial production has been increasing for four consecutive months. The Monthly Survey of Trade done by the Brazilian Institute of Geography and Statistics showed signs of steadying in trade, growing 0.1% in June. We have indications that the second half will report better performances than the first. In our baseline scenario, we expect GDP to grow in the fourth quarter compared with the third,” reported the secretary.

For 2016, the Secretariat for Economic Policies reduced the GDP contraction forecast from 3.1% to 3%. The IPCA projection was kept at 7.2%.

The economic staff’s estimates are more optimistic than the market’s. According to Focus Market Readout, weekly updated based on estimates from financial institutions published by the Central Bank, the country should end 2016 with GDP dropping 3.2% and an inflation of 7.31%.

For 2017, market analysts predict a 1.1% growth in GDP and 5.14%, in IPCA.

Interest Rates Unchanged

Brazil’s central bank kept interest rates at a decade high for the ninth straight time on Wednesday, but did not discard a cut rate later this year if stubbornly high inflation subsides. In a unanimous vote, the bank’s monetary policy committee, Copom, kept its benchmark Selic rate at 14.25%, its highest since July 2006.

In the usual release the central bank removed from its statement a previous reference to the lack of room to cut interest rates, but laid out the blueprint to lower borrowing costs.

“The committee judges that a loosening of monetary conditions will depend on factors that allow greater confidence on meeting the inflation targets at the relevant horizons,” the bank said.

The bank highlighted a reduction in uncertainties regarding the approval of austerity measures and easing food inflation as key factors to flexibilize monetary policy. The bank also said it will monitor the effects high interest rates and a subdued economy will have on the pace of disinflation.

In the statement, the bank reiterated it aims to lower inflation to its target of 4.5% in 2017. The central bank, now with Ilan Goldfan as chair, has missed that goal since August 2010 after years of heavy public spending and consumption-based stimulus.

The country’s stubborn inflation has raised worries among policymakers that it may threaten an economy they believe to be near a turning point as a political crisis eases and business confidence returns to Brazil. The bank’s willingness to sketch out the conditions needed to lower interest rates was interpreted as a clear signal borrowing costs could be lowered later this year.

Lower inflation is seen by many economists as key to bolster consumer demand and shore up an economy that is showing its first signs of recovery. An increase in investment in the second quarter after 10 straight declines has raised hopes that the worst of the recession may be over, official data showed earlier on Wednesday.

With the most controversial aspect of the political situation behind, the approval of the reforms to cap public spending and reduce pension benefits should help the central bank in keeping a lid on inflation and lowering price expectations for coming years.

MP/ABr

This is the lowest rate since January 1998, according to the Employment and Unemployment Survey (PED), promoted monthly by the State Data Analysis System Foundation (Seade) and by the Inter-Union Department of Statistics and Socio-Economic Studies (Dieese), disclosed on Monday, December 22.

According to the Dieese, the level of occupation grew 0.4%, with the creation of 72,000 work posts and stability in the number of economically active people, resulting in a reduction of 71,000 people unemployed.

The number of people working in the regions researched was estimated at 17.556 million people and the Working Population (PEA) at 20.183 million.

The research shows that the level of occupation grew in Recife (1.5%) and in the Federal District (0,9%). Variation in São Paulo was 0.4%, in Porto Alegre it totalled 0.3% and the growth in Salvador was 0.2%. It remained stable in Belo Horizonte. The main sectors in which employment rose were industry, with 38,000 new posts generated, civil construction, 24,000, and services, 17,000.

Average income of those working in the six regions grew 0.6% and reached 1,178 Brazilian reais (US$ 496). Revenues of wage earners rose 0.9%, reaching 1.231 reais (US$ 519). The revenues of those occupied rose 1.5% and those of wage earners, 2.2%.

With regard to November last year, the level of occupation in the six regions rose 4.4%. A total of 737,000 work posts were generated, a figure higher than the number of people who entered the labor market (481,000), which resulted in a reduction of 257,000 unemployed people. Over the last 12 months the rate of unemployment in the six regions researched dropped from 14.6% to 13%.

According to the technical director at the Dieese, Clemente Ganz Lúcio, the rate in November was boosted by a reduction in the number of people in the labor market and by the good performance in posts in industry and civil construction.

"The surprise is the bad performance of the retail sector. It was expected that in November there should have been an increase in occupation in the sector, but that did not take place. Maybe this is a reflex of the international economic crisis and of expectations with regard to the behavior of the economy at the end of the year."

Ganz Lúcio said that in the first quarter of 2009, there might be an increase in the number of unemployed people, as is always the case in this period, due to the lower economic activity.

"It is expected that unemployment should rise, but by how much is what may make the difference. It is also normal for the industrial sector to give its employees leave in December and January. The percentage of this leave that is seasonal and that is due to the crisis also remains to be analyzed," he said.

The improvement in income, according to Lúcio, is due to the level of occupation, which generates greater competition between labor and the increase in minimum wages.

"These are two results that when combined with the operation of labor unions in collective negotiations should bring results in the improvement both of revenues and of the volume of people employed," said the director of the Dieese.

ABr

Those who live in the street were found on sidewalks, in public squares and parks, under highways and bridges, at gas stations, beaches, alleyways, in tunnels and abandoned buildings, at recycling centers, junkyards and scrap heaps or passing the night in institutions (hostels, shelters, churches, transitional and subsidized housing).

According to the research, "70% are in the habit of sleeping on the street and 22% in hostels, but 46.5% prefer to pass the night on the street, mainly for the sake of freedom, and 44% show a preference for an institution, out of fear of violence.  Almost half (48%) of those interviewees who participated in the survey have been sleeping on the streets for more than two years."

Based on this research, out of every 100 persons on the street, 71 work, but 48% of the interviewees never have had a formal job, with a signed document.  The average weekly income of those interviewed varied from 20 to 80 Brazilian Reais (approximately 12 to 50 U.S. dollars).

The principal activity for 28% of them is the collection of recyclable material, followed by activities such as "flanelinha" (informal car-park attendant), working as a porter, in construction or in the cleaning sector.  Only 16% of those living on the street said that they begged money to survive.

In what was said with respect to family relationships, 52% said that they have at least one parent in the city in which they live.  Around 35% have frequent contact with their family, and 39% feel that they have a good relationship with their parents.  Alcoholism and drug use are the main reason (35.5%) why those interviewed are homeless.  This is followed closely by unemployment (30%) and estrangement from families (29%).

The research shows that 88.5% of those living on the street are not reached by government programs.  The government handouts get to, at most, 3% of this population.  Although 95% of them no longer go to school, more than 70% of those interviewed know how to read and write. 

The majority of the interviewees, 80%, said that they have at least one meal a day.  In relation to health, 30% said that they have some problem, such as hypertension, mental illness or AIDS, and 19% take medication.

The research highlighted that the percentage of the population of homeless that self-identifies as black, 30%, is much higher than the national average, which is 6.2%; meanwhile, those who consider themselves white, 29.5%, are well below the corresponding number among all Brazilians, 54%.

The number of unemployed persons was 1.922 million. According to the IBGE, this is the first time ever in the historical series of the survey (initiated in March 2002) that the number of unemployed persons was lower than 2 million workers, in a month of November.

Taking all months of the year into consideration, the number of unemployed persons is also below the 2-million mark in December 2005 and December 2006.

The rate recorded in November this year was the lowest since the beginning of the historical series, and translates into a 0.5% decrease compared with October.

The data disclosed by the IBGE show, on the other hand, that the total occupied personnel in the six metropolitan regions surveyed recorded no significant statistical variation in October, but grew 3.5% in comparison with November 2006. Unemployed population, though, decreased 5% as against October, and 12% compared with November last year.

Another data in the survey regards real habitual average of employed persons, which was 1,143.60 reais (US$ 634.66), an expansion both by the monthly comparison (1.3%), and the annual one (2.4%).

Real household income per capita, at 733,90 reais (US$ 407.29), grew 2.8% in the month and 4.5% in the year. Average real income mass for employed persons total led 24.6 billion reais (US$ 13.6 billion), a growth of 1.9% for the month and 5.4% for the year.

In a month-to-month comparison per region, the IBGE survey shows stable unemployment rates in all metropolitan regions.

In a comparison with November 2006, decreases were recorded in the metropolitan regions of Recife, in Northeast Brazil (1.4 %); Belo Horizonte, in the Southeast (1.8 %); Rio de Janeiro, in the Southeast (0.8 %); São Paulo, also in the Southeast (1.5 %); and Porto Alegre, in the South (1.9 %). In the metropolitan region of Salvador, the situation remained stable.

ABr

The "under the table" GDP generated by 60% of the country’s workforce is greater than the GDP of many countries, such as Colombia and Egypt, and has become a major challenge for Brazil’s economic development and bureaucrats.

This informal GDP which involves 48 million people working in the informal economy is not included in the government’s official economic statistics, nor are the workers covered by any of the country’s vast lab our and social security legislation.

"This is the country of soccer and informality," economist Marcelo Neri, head of the Getúlio Vargas Foundation Social Policy Center, is quoted by O Globo.

According to the IBGE paper, the largest numbers of informal workers are employed in the textile and transport sectors.

Private sector analysts interviewed by O Globo say that the IBGE’s estimates on the size of the country’s informal sector could be "conservative".

"There are complete production lines that have not been included," said business consultant Ricardo Neves. One of the main sectors of the informal economy can be found in the small and medium business sector, where there are an estimated ten million companies that remain unregistered.

Spokespersons from the Brazilian National Confederation of Industry, CNI, argue that one of the reasons for the huge informal sector is the enormous bureaucratic difficulties and high costs of starting a business in Brazil, as well as the steep taxes "formal" businesses have to pay.

"Conditions for companies to be born, to grow and survive are extremely difficult," underlined Everardo Maciel, head of the CNI Micro and Small Business Council.

Elusion of bureaucracy costs and inefficient taxes is "great business in Brazil" and explains the strength of the informal sector, added CNI sources.

Brazil’s "formal" GDP is estimated in US$ 620 billion (2005); Colombia’s US$ 98 billion (2005); Egypt’s US$ 95 billion (2005) and Chile’s US$ 115 billion, (2005).

Mercopress – www.mercopress.com

From May 2-5, the International Labor Organization (ILO) will be holding its 16th Regional Meeting, in Brasí­lia, capital of Brazil, to discuss political measures and immediate acts of intervention to deal with this problem.

According to José Carlos Ferreira, deputy director of the ILO in Brazil, the organization foresees that it will take up to 15 years to reduce the unemployment figures for Latin America and the Caribbean.

When the discussions in Brasí­lia are done, countries will be expected to implement the measures over which a consensus has been formed.

Representatives from 35 nations are expected to attend the meeting. The goal is to consolidate the agreements reached by the countries at previous meetings.

"We plan to introduce the creation of quality jobs on the agenda of economic and social policies. Few countries today have a real policy of job creation," Ferreira observes.

In his view, a quality job is one that is adequate for the needs of the worker and his/her family. "Moreover, the worker should receive social security coverage," he points out.

Ferreira says that there is a high index of informal employment in the majority of countries. Over 40% of urban workers are subject to these conditions, frequently without the benefits of social security coverage.

"The ILO is striving to bring to the debate a proposal for policies and actions aimed at inserting the agenda of decent employment within the broader perspective of each government’s economic and social policies."

The deputy director of the ILO in Brazil emphasizes that the global economy has been growing at an annual rate of 4-5%. However, this growth has not generated a sufficient number of jobs.

"It is no use to have economic policies that resolve macroeconomic problems without giving the population access to better jobs," Ferreira insists.

Agência Brasil

The total number of unemployed persons rose, however, from 2.232 million to 2.314 million.

For the first three months of 2006, the overall unemployment rate was 9.9%, the lowest since 2002, when the Monthly Employment Survey initiated its new historical series.

The IBGE also reported that the number of formal workers (with signed work papers) in the private sector grew 4.2% in comparison with March, 2005.

The average worker’s salary was estimated at US$ 473.72 (1,006.80 reais), 0.5% more than in February and 2.5% more than in March, 2005.

ABr

Analysts had forecasted unemployment to range between 9.3% and 9.6%. October 2004 unemployment was 10,5%.

Normally in Brazil towards the end of the year employment increases as companies and businesses prepare for the Christmas season additional demand.

The Brazilian statistics office works with numbers from urban employment in the country’s six largest cities, São Paulo, Rio de Janeiro, Salvador, Belo Horizonte, Recife and Porto Alegre.

However it does include those partially employed or working in the informal sector, which in Brazilian cities is considerable. Besides, workers who did not seek for employment the month before the poll are not included as unemployed.

More specifically in metropolitan São Paulo, Brazil’s major manufacturing hub, unemployment remained steady at 16.9% in October, according to a poll from the private organizations Seade Foundation and the Statistics and Socio-Economic Studies Inter labor unions Department.

Given the region’s labor force this means that 1.7 million Brazilians were unemployed during last October.

Furthermore, the average take home September salary, paid in early October, in metropolitan São Paulo was 1,017 reais equivalent to approximately, US$ 465, which is 1% below the previous month, breaking a steady surge that had began last February.

This article appeared originally in Mercopress – www.mercopress.com.

Copom’s action lowered Brazil’s interest rate another half a percentage point. The Selic went from 19% per year, to 18.5%, still very high when compared to economies all over the world.

Meanwhile, October’s unemployment rate, which some blame on those same interest rates, remained the same as in September, 9.6%, even though, when compared to October of last year, there was a 0.9 percentage point reduction.

The jobless rate is measured by the Brazilian Institute of Geography and Statistics (IBGE) in the country’s six main metropolitan regions: São Paulo, Rio de Janeiro, Belo Horizonte, Recife, Salvador and Porto Alegre. 

In October, Brazilian workers earned a 1.4% greater salary than in September. Last month, Brazil’s average salary was US$ 431.83 (966,10 reais), and in September, US$ 437.97 (979,83 reais).

In comparison to October 2004, average worker income went up 1.8%. In October of last year, average salary was US$ 424.19 (949,24 reais).

ABr

The results of the survey were announced on Wednesday, October 26, by the Brazilian Institute of Geography and Statistics (IBGE).

56.1% of the total unemployed population in September are women. This is the highest level for the period since 2002, when it stood at 55.6%.

The coordinator of the survey at the IBGE, Cimar Azeredo, says that the percentage can be understood, in part, as a result of the labor market, which still believes that many women are neither "family breadwinners nor responsible for their own maintenance and therefore can remain unemployed longer." Furthermore, there exists a prejudice against their entry into the labor market.

"It is well known that, historically, women have a more difficult time entering the labor market, in terms of their range of choice, for reasons of prejudice, because they can get pregnant, and because they will require medical leave.

"There is a whole process that makes it more difficult for women to enter the labor market. This situation has been changing, and business owners and the population as a whole have become more aware of this, but the difference still exists," he explained.

The age group with the highest rate among the unemployed population in these regions is from 25 to 49.

Agência Brasil