Brazil’s unemployment rate decreased to 5.4% in the October quarter, the lowest number in the IBGE’s historical series and a confirmation of the country’s labour market resiliency.
The latest edition of the Continuous National Household Sample Survey (PNAD Contínua) on Friday showed a figure slightly lower than the 5.5% median forecast in a Reuters poll.
The current number is a significant improvement over the 5.6% rate recorded in the three months ending July.
It is also much lower than the 6.2% level reported in the same period a year ago, highlighting the labour market’s robustness despite tighter financial conditions.
The score also improved on the previous record low of 5.6% for the September quarter, which was the lowest since the poll began in 2012.
Resilient jobs market helps offset economic slowdown
Brazil’s labour market has remained strong in 2025, helping to shield the economy from the effects of contractionary monetary policy.
The Central Bank maintains the Selic rate at 15%, the highest level in two decades, while working to return inflation to its 3% target.
While strong employment supports household spending during a period of slowing economic growth, it also challenges inflation management, particularly if worker wages reach new highs.
According to the study, average salaries rose 0.8% from the previous three-month period and 3.9% from a year ago.
Adriana Beringuy, IBGE’s coordinator of household surveys, emphasised how substantial job growth has influenced job-seeking behaviour.
“The high number of employed people in recent quarters has contributed to reducing the pressure to seek employment and, as a result, the unemployment rate continues to decline,” Beringuy said to local media outlet Infomoney.
Decline in unemployment and new records in employment
In absolute terms, the number of unemployed Brazilians fell to 5.910 million, the lowest since the survey began. This marks a 3.4% fall from the previous quarter and an 11.8% decrease from the same period last year.
The number of employed people also hit a record 102.555 million, up 0.1% from the previous quarter and 0.9% year on year.
However, beneath the headline data, researchers discern early signs of slowing.
Leonardo Costa, an economist at ASA, cited the survey’s seasonally adjusted series, saying that October saw the third consecutive fall in the employed population, implying that the labour market is beginning to reflect the larger slowdown in economic activity, “albeit very slowly.”
Formal jobs rise, but fresh data suggest softening ahead
Employment with a formal private-sector contract totalled 39.182 million, a 0.2% increase over the three months ended in July and another record.
Informal employment also expanded, with the number of workers without formal contracts rising by 1.0% to 13.605 million.
However, new statistics from the Caged job register, which was released a day earlier, indicate a potential shift.
According to Ariane Benedito, chief economist at PicPay, Brazil produced 85,147 formal employment in October, the lowest monthly total in the New Caged’s history and falling short of predictions.
She said these figures support the notion that the labour market’s momentum is waning.
“The October result (from IBGE) confirms a still heated labour market, but in an advanced phase of the cycle, with clear signs of moderation in both formal employment and overall employment as measured by the PNAD,” Benedito continued.
After reaching the lowest unemployment rate in the series, unemployment tends to stabilise and show a slight increase in the next readings.
Outlook: stability ahead after historic lows
Brazil’s job market remains at peak strength, setting historical records and boosting household earnings. However, economists increasingly assume that the cycle has peaked.
With the Central Bank maintaining restrictive interest rates and economic growth slowing, the following months may see a more modest job market, even if employment circumstances remain reasonably tight by historical standards.
The post Brazil jobless rate hits new historic low, but analysts flag signs of cooling appeared first on Invezz
