Brazil: National Unemployment Rate Jumps to 9.0% (Ramos)
The labor market continues to deteriorate. Employment declined 0.6% yoy in the 3-month period ending in November, while the active labor force grew 2.2%. Average real wages declined 1.3% yoy (down from -1.0% yoy in November). We expect labor market conditions to deteriorate further given the expectation that the economy will experience a deep recession in 2015-16.
The national unemployment rate printed at 9.0% in the 3-month period ending in November, visibly above the 6.5% print during the same period a year ago.
Employment declined 0.6% yoy during Sept-Oct-Nov (down from -0.3% yoy min Oct and +0.7% yoy during 1H2015). Formal employment declined 3.1% yoy, and employment in the informal sector declined 3.5% yoy. On the other hand self-employment grew 4.5% (likely a reflection of limited salaried employment opportunities)..
Average real wages declined 1.3% yoy in November (down from -1.0% yoy in October), with average real wages of the self-employed down 5.5% yoy.
We expect the labor market to deteriorate further. Policy tightening, depressed consumer and business confidence, and tighter financial conditions are expected to lead to a higher unemployment rate in 2015-16 and moderating real wage growth.
KEY NUMBERS (November):
National Unemployment Rate: 9.0% vs. consensus 9.0% and GS 9.0%.
Employment declined 0.6% yoy, while the economically active population increased 2.2% yoy.
Average Real Wage Growth: -1.3% yoy.