1. Unemployment rate drops to 6.4% in the third quarter

On Thursday (31), the Brazilian Institute of Geography and Statistics (IBGE) shared the results of a survey showing the unemployment rate in Brazil dropped to 6.4% in the quarter that ended in September. This is the second lowest rate registered by the National Household Sample Survey (PNAD) since 2012, behind only the 6.3% rate registered in the fourth quarter of 2013.

In the third quarter of 2024, Brazil had 103 million people in employment, a new record. The number was 1.2% higher than in the second quarter (representing over 1.2 million people) and 3.2% larger than the same period of 2023 (representing 3.2 million people). This means 58.4% of people at the working age in Brazil are employed, the highest employment rate for this quarter ever registered.

G1: Desemprego cai a 6,4% no trimestre terminado em setembro, diz IBGE
Valor Econômico: Desemprego é o menor da série histórica para um 3º trimestre, diz IBGE

2. Creation of formal employment rises by 21%

The Brazilian economy generated 247,810 formal jobs in September 2024, according to the Ministry of Labor and Employment. In the first nine months of the year, 1.98 million formal job vacancies were created, a 24% increase in comparison to the same period of 2023, when 1.6 million jobs were created.

This was the best result for the first seven months of a year since 2022, when 2.18 million formal jobs were created. According to official data, Brazil had a total of 47.49 million formal jobs by the end of September. This represents an increase in comparison to August this year (47.25 million) and to September 2023 (45.65 million).

G1: Criação de empregos formais soma 247,8 mil em setembro, com alta de 21%

3. Financial market predicts inflation above the target ceiling in 2024

According to Boletim Focus, analysts in the financial market have raised their projection for inflation this year, predicting that the National Broad Consumer Price Index (IPCA) will rise above the 4.5% that was the target ceiling for the inflation rate in 2024. This is the first time the financial market projects IPCA above the ceiling this year. If confirmed, this will be the first breach of the target since 2022, when inflation reached 5.79%.

The market’s assessment came after the IPCA for September was announced. Climate impacts, such as droughts, have led to an IPCA increase due to higher prices of electricity and food. For 2025, analysts are also expecting higher inflation rates, from 3.99% to 4%.

To change this scenario, the Central Bank has been increasing interest rates. The uncertainty in the international market, an increase in fiscal risk, and the price of food and electricity have contributed even further to higher inflation rates. Projections for this year and the next are well-above the goal’s center, which is 3%.

Veja: Mercado financeiro projeta estouro da meta de inflação neste ano
G1: Boletim Focus: mercado passa a estimar IPCA acima de 4,5% neste ano, com estouro da meta de inflação

4. Government considers a global cap for mandatory expenses with triggers for containment

In an effort to slow down spending and manage expectations amid market skepticism, the Brazilian government is considering a global cap on mandatory spending. If expenses with social security benefits, welfare payroll, benefits like unemployment insurance, and more exceed the threshold determined by the government, it would trigger containment actions to help keep expenses under control.

The rapid growth of these expenses, at a pace exceeding the global ceiling of the fiscal framework, is precisely why analysts are unsure about the new rule proposed by the government. From January to August, spending on social security benefits grew by 3.4% above inflation compared to the same period in 2023. Spending on salary bonuses and unemployment insurance rose by 7.8%. For the BPC (Continued Assistance Benefit), paid to low-income elderly individuals and people with disabilities, the increase was even more significant, at 16.6%.

Folha de São Paulo: Governo avalia limite global para despesas obrigatórias com gatilhos de contenção

5. Consumption in Brazilian households grows 0.95% in September

Household consumption in Brazil grew by 0.95% in September 2024 compared to the same period in 2023, according to the Brazilian Association of Supermarkets (ABRAS). Year-to-date consumption remains positive, aligned with the projected 2.50% growth for 2024. From January to October 2024, the sector also opened 279 new stores.

The gradual growth of formal employment and the improvement in family incomes have led to this increase, with expectations that the indicator will remain positive through the rest of the year. The Abrasmercado index, an analysis of the price of 35 commonly consumed supermarket items, including rice, beans, potatoes, milk, and meats, saw a monthly increase of 0.90% in September. Nationally, the average price of these products rose from R$732.82 to R$739.44.

From January to September, the Abrasmercado index increased by 2.34%, primarily due to rising beef prices, which tend to shift demand to other proteins, thereby raising prices for meats overall.

IstoÉ Dinheiro: Consumo nos lares cresce 0,95% em setembro ante setembro de 2023, mostra Abras