occupancy keeps pace with GDP in 2022

The year 2021 was a year of reaction on the Brazilian labor market, with a drop in unemployment which should not, however, remain at the same levels throughout 2022. The assessment is made by economists consulted by Gazeta do Povo based on the expected scenario. for the coming months, which adds to the loss of dynamism of economic activity and the uncertainties typical of electoral periods.

Consolidated figures from the IBGE, which date back to October 2021, show an unemployment rate of 12.1%, or 12.9 million Brazilians looking for a job, after a year 2020 ended around by 14.5%. This disclosure comes in the wake of seven consecutive drops in the rate observed by PNAD Contínua. With the exception of the first quarter of 2021, which ended on a high – at 14.9% – the month-on-month starting in April saw an unemployment rate falling to 12.1% in October.

According to XP, it is about a coherent recovery of the level of employment – even if progressive -, consequence of the economic reopening (after restrictions motivated by the health crisis) and which can still progress despite the expected “brakes” .

The consulting firm’s projection for the unemployment rate at the end of 2021 is 11.8% and the country is believed to return to pre-pandemic levels in the coming months, said Rodolfo Margato, economist at XP. . The unemployment rate in December 2019, before the arrival of the coronavirus in Brazil, was 11.1%.

“On the one hand, in terms of employment level, some sectors still benefit from increased mobility and economic reopening. The biggest highlight here is undoubtedly the service sector, especially the services provided to families, tourist activities. We still see room for an increase in the population employed in these activities, something that has not been discontinued at the turn of the year. I would say that the first semester will still bring positive results ”, assesses

Despite the recovery scenario, Margato points out that the unemployment rate remains high, preventing this from translating into an increase in average income levels – the lowest since 2012 and on a downward trajectory since mid-2021. Here, inflation enters the equation (which flattens the purchasing power of wages) and the so-called composition effect (which lowers the average income of the population as informal workers – less well paid – return to work). job).

Slow economy, sluggish employment

The main element of what should be a brake on the recovery in employment in 2022 is a weakening of local activity, impacted by the lagged (and yet to come) effects of high interest rates. “The Selic which closed last year at 9.25% and in our accounts reached 11.5% in March. There will be a significant impact of this tightening of monetary policy in the second half of the year, ”he said.

As a thermometer, Margato indicates GDP, with different dynamics between semesters. “That sums up our vision well: with growth in the first quarter of the year, performance close to zero in the second quarter and declines in the third and fourth quarters. Thus, the weakening of the domestic economy from the second quarter – in our accounts – ends up impacting the main labor market conditions, reducing the momentum for hiring entrepreneurs and maintaining the level of income (real, especially) quite low. “, complete.

The prospect is therefore that the figures for the employed population “go awry” in the second half of 2022, with “a more timid performance, perhaps even a few months of decline”, he predicts. The XP economist also includes in this account the fact that many labor-intensive sectors (such as civil construction) contracted sharply in 2021, with a run-out in 2022.

“The workforce must dictate the pace of the unemployment rate”

Looking back, the chief economist of Banco Original, Marco Caruso, draws up a good assessment of the employment figures in 2021, better than expected, according to him, even if the quality is not the best. “It’s natural to come out of the recession. You start to employ temporarily first, you have slower entry, you start to pay less, wages are lower, but the momentum is in place. For 2022 I think the doubts are a little greater, “he adds.

Looking ahead to the coming months, Caruso underlines the negative influence of weaker economic activity on the recovery of the labor force, but believes that another element will be essential in dictating the unemployment rate: the posture of the hand – of work itself facing the scenario.

The Original estimates that the country should reach the end of December 2022 with unemployment at 10.5%, therefore with a continued decline in the unemployment rate (albeit slow, following a slowdown in GDP), but Caruso considers that the index can bring misleading signals – such as what happens as a result of fluctuations in discouragement, for example.

“In times of great recession, unemployment sometimes does not rise as quickly as it should, because many people simply stop looking for work. The reverse also applies: in an improvement in the labor market and economic activity (as was the case in 2021), you often have unemployment that does not improve as quickly because people, confident to find a job, start looking for more, ”he explains.

For Caruso, it will still be necessary to understand these movements during the year. “The tip is going down because the occupation will continue to improve, but the dynamics of the workforce can help this unemployment to go down a little more. Demand may be lower due to the prospect of placement difficulties, wages still depressed. Maybe unemployment will drop faster, but not necessarily for good reasons. ”

electoral uncertainties

Another point likely to stop a more expressive continuation of the fall in unemployment, the usual uncertainties of the election years which, for XP, should gain importance from the second quarter.

“There will be a lot of uncertainties in the political arena, especially in the tax arena, and they will eventually reduce the intention of entrepreneurs to make new hires. This postponement of hiring behavior [é esperado] as uncertainties continue to hover and businessmen wait for more information to then make the decision to expand the team, the production, ”says Margato.

Caruso, of Banco Original, also points to doubts about fuel-efficient driving from 2023, according to the winner. “If there is a possibility of alternating power (and, obviously, economic policies), it is natural for people to wait to invest. In this case, where the numbers are apparently tighter in the election, it is exacerbated, ”explains the economist.

This context has also been linked to changes caused by the pandemic, such as the creation of federal programs to avoid layoffs, such as the Emergency Employment and Income Maintenance Program (BEm), which has enabled reductions in employment and income maintenance. working hours and wages and the suspension of contracts to avoid staff reductions. “In a way unemployment is anesthetized, naturally it will lose its momentum in 2022”, he concludes.

The pandemic is still a risk, but it does not change the history of employment

Although not part of the baseline scenario envisioned by economists interviewed by Gazeta do Povo, a possible resurgence of the Covid-19 pandemic is classified as a significant risk and should be monitored, given the relevant doubts about the dynamics of the new variants. , like the micron.

According to Rodolfo Margato, there is no doubt that the second wave (which led to closures, especially between the months of February and March 2021) has hurt the labor market, with a reduction in hiring and an increase in the effect of discouragement. “You cannot rule out this type of scenario. [Um novo episódio] could hamper and possibly even interrupt this labor market recovery earlier than expected. But it is a risk factor. If we are right, the loss of breath on the labor market will occur later, for macroeconomic reasons and less linked to public health ”, reinforces the economist of XP.

In the opinion of Marcos Caruso, of Banco Original, there are no signs of closures or mobility restrictions, but if they do occur, they should be withdrawn, according to him, not so much because of public policies , but because of consumer choice. “With that, there would be a reduction, for example, in the consumption of certain face-to-face services, with a certain impact on the labor market. But, like myself in the world, the omnin does not seem to change history as a whole, ”explains the economist.

In addition, the possible prospects would be smaller losses, but again concentrated on informal and less educated people. “The least affected are precisely those who were already the least affected when the pandemic was very strong. Basically we are talking about areas where you can actually work remotely, of which there are not many. People generally more qualified and formal; because there are sectors where digital simply does not exist, which depend on the physical contact of people. The pandemic ends up exacerbating certain inequalities, ”he assesses.

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