Unemployment Falls in Brazil. Shrinking of Economically Active Population Helps.

The encouraging results of the National Employment Survey, announced by the Brazilian Institute of Geography and Statistics (IBGE), can be explained by the creation of a record number of job market openings and the decline in the growth of the Economically Active Population (PEA).

This is the view of Marcelo de ívila, an economist at the Institute of Applied Economic Research (IPEA), an organ linked to the Ministry of Planning.

The unemployment rate in December was determined to be 8.3%, the lowest since 2002. In ívila’s opinion, the reason for December’s positive figures is not simply the seasonal factor, which leads to the hiring of more people around Christmastime.

"It is certainly true that there is a large number of temporary workers at the end of the year, but that is not the reason for the drop in unemployment," he said.

ívila attributes the drop, first of all, to the record number of job openings in December: 107,000. In addition, the population comprising the active age bracket, working or not, forming what is referred to as the PEA, grew far more slowly in 2005: 1.1%, compared with 2.2% in 2004. The economist expects the unemployment rate to remain below 10% in 2006.

In ívila’s view, the tendency is for the job market to improve this year, since it shows signs of the quantitative component evidenced in 2004 in terms of employment levels and the qualitative component that showed growth in 2005.

"More formal jobs were created, and with better remuneration. I think that these two ingredients will mix in 2006, improving conditions for workers and those who are unemployed. Consequently, there will be economic growth, including highly positive results for the GDP (Gross Domestic Product)," he judged.

Agência Brasil

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