IBGE: Interest rates and retail crisis may have influenced the unemployment rate, says economist

The fee of unemployment at the Brazil increased 7.9% in the 1st quarter of 2024. According to Mackenzie economist Hugo Garbe, the data released by the Brazilian Institute of Geography and Statistics (IBGE) this Tuesday (30) may have been negatively influenced by the services sector by two factors: interest rate It is retail crisis.

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“The prospect of a slower-than-expected reduction in interest rates has a direct impact; in addition, the retail crisis, in which several companies took on debt during the pandemic, may have contributed to the unemployment rate this quarter”, he highlights

He points out that in 2023, a record number of requests for judicial recovery were registered in the country, as a result of debt during the pandemic, such as Casas Bahia and Americanas. According to Garbe, in an analysis of the drop in the Service Confidence Index (ICS), it is possible to see that there has been a decrease in the employer’s “appetite” to open new job vacancies.

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“The index measures the entrepreneur’s willingness and confidence in the economy. If he is confident that the economy will do well, he will invest more in the business, open more stores and factories, and consequently employ more people,” he explained.

Despite the increase of 0.5% compared to the last three months of 2023, which recorded a rate of 7.4%, the number is the lowest for the period since 2014, when the index was 7.2%.

According to the coordinator of IBGE Household Surveys, Adriana Beringuy, the increase in the rate compared to the previous quarter is related to the layoff of temporary employees at the end of the year.

“The increase in the unemployment rate was caused by the reduction in occupancy. This panorama characterizes a seasonal movement of the workforce in the first quarter of each quarter, with losses in employment compared to the previous quarter”, he explains.

Income increased

IBGE data, which is part of the Continuous Pnad (Continuous National Household Sample Survey), shows that, despite the increase in unemployment, income among the employed grew and reached R$3,123 on average. It is the highest level for the 1st quarter of 2012, the beginning of the survey’s historical series, according to the Institute.

In the quarter, income growth was 1.5% in the quarter (the value was R$3,077 in the 4th quarter of 2023) and 4% in the year (the value was R$3,004 in the 1st quarter of 2023).

Forecasts for the coming months

According to the economist, the forecast for the coming months is for a “shy” recovery in employment, “despite the favorable scenario”.

“Projections for the coming months, despite favorable macroeconomic conditions, such as lower interest rates and inflation control, indicate a potentially timid recovery,” he said.