SAO PAULO (Reuters) -Brazil’s jobless rate fell to 8.3% in the three months through October, statistics agency IBGE said on Wednesday, below market expectations as the key indicator continues to hover around seven-year lows.
Even so, the fresh drop was not enough to refrain economists from seeing softening labor conditions ahead on a tight financial situation and as the ongoing recovery also factors in seasonal elements.
The data represented the lowest unemployment level in Latin America’s largest economy since July 2015 and the lowest for the August-October period in eight years, IBGE said.
The number of employed people, it added, rose to 99.7 million, a new record for the series that started in 2012.
“This trend has been under way since the second half of 2021, and as we approach the final months of the year – a period in which there is historically an increase in job creation – it continues,” research manager Adriana Beringuy said in a report.
The median forecast in a Reuters poll had projected an unemployment rate of 8.5%, after it hit 8.7% in the rolling quarter through September.
Brazil’s government has been betting on an improving labor market to drive economic growth in 2022, with Economy Minister Paulo Guedes saying he expected the jobless rate to drop to 8% before the year ends.
Economists, however, are seeing mounting evidence of slowing momentum.
“For the second month in a row, the lower unemployment rate was solely a result of a lower participation rate,” economists at JPMorgan said, referring to the labor force divided by total working-age population.
They added that evidence was increasingly pointing to softening conditions since the end of the third quarter.
Andres Abadia, chief Latin America economist at Pantheon Macroeconomics, praised the latest data as a good start to the fourth quarter on a relatively healthy economy and the lagged impact from fiscal support, but cautioned that recent surveys suggested a fading recovery.
“Tight financial conditions, increased policy uncertainty, and deteriorating external fundamentals point to a modest increase in the unemployment rate during the first half of next year,” he said.
(Reporting by Gabriel AraujoEditing by Gareth Jones and Nick Zieminski)