Unemployment goes to 12.9% in May with record drop in the number of occupied

The official unemployment rate in Brazil rose to 12.9% in the quarter ended In May, reaching 12.7 million people, with a closing of 7.8 million jobs compared to the previous quarter. The data are from the National Survey by Continuous Monthly Household Sample (Continuous PNAD) released on Tuesday (30) by the Brazilian Institute of Geography and Statistics (IBGE).
The result represents an increase of 1.2 percentage points compared to the quarter ended In February (11.6%) and 0.6 percentage points compared to the same quarter of 2019 (12.3%).
Thus, the number of people in line for a job increased by 3% (368,000 people more) compared to the previous mobile quarter (12.3 million people) and was statistically stable compared to the same period in 2019 (13 million people).
This is the highest unemployment rate since the quarter ended March 2018, when it was 13.1%. And unemployment has not only been higher because many people simply stopped looking for work or were not available to work amid the coronavirus pandemic.
In addition to the increase in unemployment, the Covid-19 crisis and the recession scenario also had a strong impact on occupation, informality, discouragement and underutilized population.
Check out the main highlights of the IBGE survey:
- Country lost 7.8 million jobs in 3 months
- Of the 7.8 million fewer people employed, 5.8 million were informal
- Drop of 2.5 million employees with signed portfolio
- Fall of 2.4 million workers without a signed license
- Fall of 2.1 million self-employed
- Occupation in the labor market reached the lowest historical level
- For the first time, less than half of the working-age population is busy
- The informality rate (37.6%) is the smallest in the historical series
- Discouragement (who gave up looking for work) set a new record, gathering 5.4 million
- Underutilized population reached a record 30.4 million people
The population occupied in the country had a record drop of 8.3% (7.8 million fewer people) in 3 months and shrank to a total of 85.9 million Brazilians. Compared to May last year, the drop was also record, of 7.5% (7 million fewer people).
"It is an unprecedented reduction in research and mainly affects informal workers. Of the drop of 7.8 million people employed, 5.8 million were informal," said research analyst Adriana Beringuy. Everything indicates that, in fact, these people who lose their occupation are not returning to the labor market in the form of demand for new occupation. That is, without putting pressure on unemployment," he added.
For the first time, less than half of people of working age are employed, with this percentage reaching 49.5% in the quarter ended in May, down five percentage points from the previous quarter. According to IBGE, it is the lowest level of occupation since the beginning of the survey in 2012.
The population outside the workforce reached a record mark of 75 million people, up 13.7% compared to the previous quarter. As a comment, the sum of the number of unemployed and people outside the workforce (87.6 million) exceeded that of the employed in the country (85.9 million).
"An important part of the population outside the force is formed by people who would even like to work, but who are not being able to enter the market, most likely due to the economic scenario, the difficulties in finding employment, either due to social isolation, or because household consumption is low and companies are also not hiring. So this month of May deepens everything we were seeing in April," Beringuy said.
The disallent population (people who gave up looking for work) set a new record, totaling 5.4 million, up 15.3% (718,000 more people) compared to the previous quarter and 10.3% compared to the same period in 2019.
The number of employees with a signed work permit fell to 31.1 million, the lowest level in the series. The figure represents a decrease of 7.5% (2.5 million fewer people) compared to the previous quarter and a decrease of 6.4% (2.1 million fewer people) compared to the previous year.
Those without a signed portfolio totaled (9.2 million people), with a reduction of 20.8% (2.4 million fewer people) compared to the previous quarter and 19% compared to the previous quarter.
The number of self-employed workers fell to 22.4 million people, a reduction of 8.4% compared to the previous quarter and 6.7% compared to the same period in 2019.
The number of domestic workers fell by 18.9% (1.2 million people less) compared to the quarter ended Feb. The number of employers, in turn, fell 8.5% (-377,000 people) compared to the previous quarter.
The underutilized population reached a record number of 30.4 million people, with an increase of 13.4% (3.6 million more people), compared to the previous quarter and 6.5% (1.8 million more people) in the interannual comparison. The composite rate of underutilization stood at 27.5%, also a record.
The labor market showed widespread job losses as a result of stoppage measures to contain the coronavirus, with trades and industries being kept closed and people in social isolation.
The only group of activities that had an increase in the number of people employed was public administration, defense, social security, education, human health and social services, which grew 4.6% in 3 months. That means an increase of 748,000 people in the sector.
The largest drop was observed in trade, repair of motor vehicles and motorcycles (-11.1%), with 2 million fewer employees. The industry lost 1.2 million people (-10.1%), domestic services 1.2 million people (18.7%) and construction, 1.1 million (-16.4%).
The informality rate of the economy fell to 37.6% of the employed population, the lowest since 2016, when the indicator began to be produced, bringing together 32.3 million workers. In the previous quarter, the rate had been 40.6% and in the same quarter of 2019, 41.0%.
Informal workers add up professionals without a signed license (private sector employees and domestic workers), without CNPJ (employers and self-employed) and without remuneration.
"Numerically we have a drop in informality, but that's not necessarily a good sign. It means that these people are losing occupation and are not entering another job. They are staying out of the workforce," said the researcher.
With the reduction in the number of informal workers, a group that generally earns lower salaries, the average income increased by 3.6%, reaching R$ 2,460, the highest since the beginning of the series. The mass of real income was estimated at R$ 206.6 billion, a decrease of 5% compared to the previous quarter.
The day before, the Ministry of Economy reported that the country closed 331,901 vacancies with a signed portfolio in May, bringing to 1.487 million the number of formal jobs eliminated since March.
Another survey released last week by IBGE showed that, between May 3 and June 6, the number of unemployed in the country increased by about 1.4 million, mostly in the Southeast.
Amid a scenario of recession and gdp (Gross Domestic Product) to fall in 2020, Ibre/FGV projects that the average unemployment rate in 2020 should reach 18.7%.
The Central Bank's most recent Focus survey shows that the market's expectation is a 6.54% decline for the economy this year, going up 3.50% in 2021.
The day before, data released by the Ministry of Economy showed that the Brazilian economy lost 1.1 million job vacancies with a signed portfolio between March and April. In April alone, 860,500 formal jobs were closed, the worst result for a single month in 29 years, according to Caged data.