Brazil Tight Labor Market Backdrop

Brazil's labor market remains tight with unemployment at 5.5% (sa), below NAIRU levels, despite a slight softening in sequential wage growth. Declining labor participation, potentially linked to fiscal benefits, continues to exert cost-push pressure on services inflation.

Key Takeaways

• 1.The Brazilian labor market remains extremely tight, with seasonally adjusted unemployment (5.5%) sitting below the estimated NAIRU range.
• 2.Real wage growth is solid at 5.4% yoy, though sequential growth showed signs of softening in April compared to March.
• 3.Labor force participation is declining (62.1%), possibly influenced by generous fiscal transfers and benefits impacting informal sector workers.

Table of Contents

• KEY NUMBERS (Apr)
• DETAILS
• Disclosure Appendix
• Global product; distributing entities
• General disclosures

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