Brazil’s job creation outpaces expectations in March, signals stronger activity

By Thomson Reuters Apr 30, 2024 | 8:29 AM

BRASILIA (Reuters) – Brazil’s creation of formal jobs in March came in well above expectations, reinforcing the view of a stronger economic activity at the beginning of this year.

Latin America’s largest economy created a net 244,315 formal jobs in March, Labor Ministry data showed on Tuesday, significantly more than the 188,000 expected in a Reuters poll of economists.

In the first quarter, 719,033 formal jobs were created according to the government’s adjusted series, marking a 33.9% increase compared to the same period last year.

The services sector led the creation of new positions by a wide margin both in March (+148,722) and year-to-date (+419,286).

The average salary upon hiring slightly decreased to 2,082 reais ($405) from 2,087 reais the month before.

The country’s total formal job count now stands at 46.2 million, with nearly an estimated 40 million informal workers not factored into this tally.

Data released by statistics agency IBGE on Tuesday showed that the unemployment rate reached 7.9% in January-March, slightly below expectations, marking the lowest for a quarter through March since 2014.

The central bank, which is set to make its next monetary policy decision next week, has emphasized that it is closely monitoring the dynamics of income from various surveys to better assess the degree of slack in the labor market and its potential impacts on service sector inflation.

Finance Ministry Fernando Haddad said last month that the government may bump up its forecast for 2024 economic growth to at least 2.5% in the coming months from the 2.2% official projection, and that he hoped policymakers would not be frightened by employment data when assessing room for further rate cuts.

The central bank has already reduced its Selic basic interest rate by 300 basis points to 10.75% since it started an easing cycle in August.

($1 = 5.1419 reais)

(Reporting by Marcela Ayres; Editing by Andrew Heavens and Jonathan Oatis)