Brazil’s Job Market Slows but Shines with Record Pay

Brazil’s unemployment rate rises to 6.8% in the three months ending February 2025, the Brazilian Institute of Geography and Statistics reports. This uptick from 6.1% last trimester signals a cooling labor market, yet record income and formal jobs reveal a deeper story of resilience.

The rate matches the lowest for a February-ending period since 2014, despite climbing from 7.8% a year ago. Analysts predict a gradual slowdown as the economy weakens, with growth forecasts dropping from 2.1% to 1.9% for 2025.

Meanwhile, workers’ average income hits R$3,378 ($593), up 1.3% quarterly and 3.6% yearly, the highest since 2012. Formal employment surges to 39.56 million private-sector workers with signed contracts, a 1.1% quarterly rise.

This growth, driven by commerce hiring, contrasts with a 6% drop in informal jobs, now at 13.54 million. Total employment dips 1.2% to 102.66 million, though it grows 2.4% annually.

Unemployment swells by 10.4% to 7.47 million, a seasonal shift from year-end job losses, yet falls 12.5% from 2024. Rising wages and jobs fuel consumption but challenge inflation control, prompting the Central Bank to lift the Selic rate to 14.25%.

Last year, Brazil’s economy expands by 3.4%, boosted by investment and spending. Now, high interest rates and a strong dollar at R$6.18 ($1) strain costs. President Lula’s policies, like minimum wage hikes, support jobs but stoke inflation fears.

The labor market’s strength, down from a 14.7% unemployment peak in 2021, faces tests ahead. Industry falters with a 0.3% output drop in December 2024, hinting at tougher times. Brazil balances growth and stability, a story unfolding beyond the numbers.