January 27, 2012 (Latin America Data Byte)
By Rebecca Ray
Jobs have been concentrated in the financial sector amid losses in industry and commerce.
Brazil announced yesterday that its unemployment rate hit a record low of 4.7 percent. A dip in unemployment is not unexpected for December; it falls dramatically at the end of every year. Nonetheless, even on a seasonally-adjusted basis unemployment is at a record low: 5.5 percent.
Behind this good news, however, is slowing job creation. As the figure below shows, over the last year job creation has not been enough to keep up with growth in the working-age population. Meanwhile, the labor force shrank in the most recent quarter for the first time since the recession, which helped bring unemployment down to its record level.
Moreover, almost all of the new jobs created in the last quarter of 2011 – nearly 90 percent – were in business services, finance, and real estate. This is remarkable given that the sector comprises only 16.9 percent of all jobs. Meanwhile, other sectors that have traditionally been drivers of job growth, such as industry and commerce, actually lost jobs. This is the first time that industry and utilities have lost jobs outside of a recession since 2006.
On an annual basis, 2011 saw the lowest gains in employment since records began in 2003. Again, business services, finance and real estate accounted for most new jobs: about two-thirds. Industry and public utilities lost jobs for the first time since before the 2008 recession. It will bear watching whether business services and finance will continue to create enough jobs to counteract the losses in industry, or if this increase is just a temporary product of international investors’ recent interest in Brazil’s financial sector.