Itaú BBA - Labor market still driven by growth in informal jobs in 3Q17

Macro Brazil

< Back

Labor market still driven by growth in informal jobs in 3Q17

October 31, 2017

The real wage bill expanded 3.9% yoy and 1.2% vs. 2Q17.

• According to the national household survey (PNAD Contínua - IBGE), Brazil’s nation-wide unemployment rate declined to 12.4% in 3Q17 from 12.6% in the quarter ended in August. Using our seasonal adjustment, unemployment was stable at 12.6%.

• The trend is still influenced mainly by informal jobs. The increase in employment in September was particularly noticeable in the “domestic worker” category, up by 236,000 people vs. the previous month.

• The real wage bill expanded 3.9% yoy and 1.2% vs. 2Q17.

Employment climbs 1.6% yoy

The nation-wide unemployment rate reached 12.4% in September[1], in line with expectations (median of market estimates: 12.4%; Itaú: 12.5%). The indicator increased 0.6 p.p. from 11.8% one year earlier. Applying our seasonal adjustment, the unemployment rate was stable at 12.6%.

The labor force grew 0.2% at margin and 2.4% yoy. The participation rate (ratio of the labor force to the working-age population) remained stable at 61.8%, above its historical average (61.3%).

Employment advanced 0.4% mom/sa and 1.6% yoy. This trend is still influenced mainly by informal jobs (see chart).

Real wage bill continues to expand

Nominal wages rose 1.1% qoq in 3Q17 and 4.5% yoy.

The average real wage advanced 0.3% qoq and 2.0% yoy. These readings suggest that the downward pressure on real wages caused by high unemployment has been partially offset by falling inflation.

The real wage bill climbed 3.9% yoy, boosted by higher employment and higher real wages. On a seasonally-adjusted quarterly basis, the indicator advanced 1.2%, getting a bigger contribution from employment than from disinflation.

 

Artur Manoel Passos

 


[1] All figures in the Continuous PNAD are in the form of three-month moving averages.

 



< Back