Brazil Has Lowest Jobless Rate in 9 years: 6%

Brazilian worker with his working notebookBrazil’s July unemployment rate, as measured by the Monthly Employment Survey (Pesquisa Mensal de Emprego – PME), came in at 6%, which is the lowest for the month of July since the survey began, in March 2002.

July 2011 unemployment was slightly lower in comparison with the previous month and the year-to-year comparison: in June, the PME was 6.2%, and in July 2010, it was 6.9%.

The PME surveys only the six largest metropolitan regions in Brazil (São Paulo, Rio de Janeiro, Recife, Salvador, Porto Alegre and Belo Horizonte).

According to the government statistical bureau (IBGE), in July 2011, the total number of people working in the country’s six principal urban regions totaled 22.5 million, with 1.4 million unemployed; that was some 200,000 fewer unemployed than in July 2010. And some 456,000 more people with jobs than in July 2010.

Another important metric in understanding the Brazilian labor market is the number of workers on-the-books (with working paper in order and signed by the employer), in light of the fact that there is still a huge informal or shadow economy.

The July PME found 10.9 million workers “registered,” up 1.2%, compared to June, and up 7.1%, compared to July 2010 (which works out to some 726,000 more workers in the formal job market in July 2011 than in July 2010, paying taxes and getting benefits).

The PME also reported that in July average take-home pay for wage earners was 1,612.90 reais (US$ 1005.00), the highest since 2002, up 4% compared to July 2010.

Primary Surplus

In Brazil, one of the metrics used to measure government performance is the so-called primary account that measures activity in a delimited area known as the central government, that is, the Social Security system, the Central Bank and the National Treasury.

The primary account also does not take into consideration interest payments (contrary to the fiscal account, which does). Interestingly, the money saved (the primary surplus) is used to make interest payments.

Brazil had a strong result in its primary account with a surplus in July of 11.184 billion reais (US$ 6.97 billion), compared to a primary surplus of 10.6 billion reais (US$ 6.6 billion) in June.

For the year, January to July, the cumulative primary surplus is now at 66.9 billion reais (US$ 41.68 billion), significantly larger than the 25 billion reais (US$ 16.14) primary surplus during the same period in 2010.

According to a report from the National Treasury, with the July result, Brazil has now achieved almost 82% of its target primary surplus for the year. The government primary surplus target for 2011 is 81.8 billion reais (US$ 50.97 billion), approximately 3% of GDP.

Here is a breakdown on the July primary surplus: the Treasury had a surplus of 13.3 billion reais (US$ 8.29 billion); the Social Security system had a deficit of 2.1 billion reais (US$ 1.31 billion) and the Central Bank a deficit of 67 million reais (US$ 42 million).

The Treasury said that it registered a significant increase in corporate tax revenue due to higher profit margins in the period from mid-2010 to the end of the first half of 2011.

ABr

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