BRASILIA (Reuters) – Brazil’s unemployment rate rose to its highest in just over a year due to the coronavirus crisis, official figures showed on Thursday, as a record number of people left the workforce, pushing labor force participation to an all-time low.
Although the 12.6% unemployment rate was lower than economists had expected, other indicators such as the number of people leaving the workforce and the underemployment rate point to a weaker labor market than the headline figure suggests.
The 12.6% headline jobless rate in Latin America’s largest economy in the three months to April was the highest since early last year, but less than the median forecast in a Reuters poll of 13.3%.
The data comes a day after separate figures showed Brazil lost a record 860,503 formal jobs in April, the biggest monthly fall in employment since comparable records began in 1992.
Thursday’s figures from statistics agency IBGE showed that 89.2 million people were in work, down almost 5 million or 5.2% from the preceding three-month period, both record declines.
That pushed the labor force participation rate down to a record low 51.6%, with a record 70.9 million people now out of the workforce.
“The already weak labor market softened further in April … and is expected to weaken visibly more in coming months,” wrote Alberto Ramos, head of Latin American research at Goldman Sachs, in a note on Thursday.
“The unemployment rate would have spiked more were it not for the significant decline in labor force participation,” he said.
The number of Brazilians officially out of work stands at 12.8 million, and the number of underemployed rose 8.7% to a record 28.7 million, IBGE said. The underemployment rate jumped to 25.6%, also a record.
Central bank president Roberto Campos Neto said he expects the unemployment rate will eventually rise above 15%, while economists at Citi reckon it will approach 18%.
(Reporting by Jamie McGeever; Editing by Nick Zieminski and Bernadette Baum)
