Job losses in Brazil accelerated in October to the fastest pace so far this year as the country’s political and economic crisis continues to worsen. Brazil’s economy lost a net 169,131 payroll jobs in October, the Labor Ministry reported, up from 95,602 layoffs in September.
Brazilian companies cut staff across business sectors and regions. Manufacturing, construction and services firms laid off nearly 50,000 workers in each sector in October.
Brazil’s deep recession has already cost nearly 1.4 million jobs in the past 12 months. Even those who have kept their jobs are feeling insecure about the future, sending consumer confidence measures to successive record lows.
The Brazilian economy is expected to shrink more than 3% this year and 2% in 2016, in what would turn out to be its longest recession since the 1930’s.
The crisis, partly caused by market worries due to a political stalemate in Congress, has weighed on President Dilma Rousseff’s popularity. Opposition parties have demanded her impeachment just a year after her re-election, as her approval rating plummeted below 10%.
The Northern state of Pará, rich in agricultural and mineral commodities, had the steepest month-on-month decline in payroll jobs at 1.15%, labor ministry data showed.
About 95,000 jobs were trimmed in Brazil’s most populous region, the southern states of São Paulo, Rio de Janeiro and Minas Gerais.
Economic activity in Brazil contracted for the fourth straight quarter, central bank data showed as Latin America’s biggest economy plunges further into recession. The bank’s IBC-Br economic activity index indicates economic activity fell 1.41% in the third quarter from the previous three months.
That follows contractions of 2.09% in the second quarter, 1.05% in the first and 0.50% in the last quarter of 2014. The IBC-Br, a gauge of activity in the farming, industry and services sectors, fell 0.5 percent in September from the prior month.
The index also an early indicator of GDP. Brazil national stats office, IBGE, is scheduled to release third-quarter GDP data on December 1st.
Activity fell 6.2% in September from a year earlier, the steepest of a series of declines that started almost a decade ago. It is also feared that activity probably continued to fall at the start of the fourth quarter as industrial output plummeted and rising unemployment likely hit consumption.
Brazil’s economy has slipped into its worst recession in 25 years, hit by high inflation, rising interest rates and a confrontation between the Executive and Congress which only generates uncertainty and conditions the passing of tax hikes and spending cuts by president Dilma Rousseff’ government.
Independent economists expect the economy to contract 3.10% this year. Activity is also expected to contract next year in what would be the longest recession in Brazil since the Great Depression of the 1930s.