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Continuous PNAD

Unemployment rises to 12.2% and hits 12.9 million in Q1 2020

Section: Social Statistics | Alerrandre Barros

April 30, 2020 09h00 AM | Last Updated: April 30, 2020 01h25 PM

More than 1,2 million persons were in search of a job in Brazil in the first quarter of 2020 - Photo: Dênio Simões/Brasília Local Branch

The unemployment rate increased to 12.2% in the first quarter this year, an increase of 1.3  percentage points (p.p) in comparison with the last quarter of 2019, according to Continuous PNAD, released today (30) by the IBGE. That figure represents a total 1.2 million persons more in search of a job. Brazil has a total 12.9 million unemployed.

“Increase of the unemployment rate was expected. The first quarter of a year usually maintains the number of persons hired in the Q4 the previous year. The current increase in the rate, however, was not among the highest lately. In 2017, for example, it was 1.7 p.p.”, says the survey analyst, Adriana Beringuy, as she remarks that, compared with Q1 2019 (12.7%), the unemployment rate in Q1 2020 recorded a decrease (-0.5 p.p.).

Beringuy also calls attention to the 2.5% decrease in the employed occupation overall, about 2.3 million persons. According to Ms. Beringuy, that was the biggest decrease in all the time series and also affected domestic services (-6.1%), which recorded the biggest decrease in the series as well. Reduction of 7% in employment without a formal contract in the private sector also hit a record figure. Employment with a formal contract without a CNPJ registration also fell.

“It can be said there was widespread decrease in the several forms of participation in the labor market, for both formal and informal workers. However, the effect was most significant in terms of informal employment. Out of the 2.3 million persons who left the category of employed persons, 1.9 million belong to the informal workforce”, says the survey analyst.

Consequently, the informality rate recorded a slight change from 41%, in Q4 2019, to 39.9%, in Q1 2020, which amounts to 36.8 million. Informal workers are those without a formal contract, employers without a CNPJ registration, domestic workers without a formal employment contract and auxiliary family workers.

Losses were recorded in all the activities: industry (2.6%), construction (6.5%), trade, repair of motor vehicles and of motorcycles (3.5%), lodging and feeding (5.4%), other services (4.1%) and domestic services (5.9%). 

Also according to the survey, the number of persons out of the workforce increased to 67.3 million and surpassed the previous record of 2012. That group is formed by persons who were not searching for work, but who do not belong to the discouraged group. Discouraged persons, those who gave up looking for a job, amounted to 4.8 million, a statistically stable scenario in both comparisons.

“There had been increase of the population out of the workforce; it is worth mentioning that, in the first quarter of each year, that population usually increases, because it is vacation time and many people stop searching for work”, Adriana Beringuy says.

The survey analyst cannot guarantee that social isolation measures, in effect due to the Covid-19 pandemic caused by the new coronavirus, has had an effect on the unemployment rate of the quarter ended March.

“Most of the quarter is still out of that scenario. I cannot be sure about the small or big contribution of the pandemic, because the quarter is marked by seasonal movements, but surely some activities have been more affected”, she remarks.

The average real earnings (R$ 2,398) in the quarter ended March was stable in both comparisons. The wage bill fell to R$ 216.3 billion, when compared to the last quarter of 2019, a change of -1.3%. Against the same quarter in the previous year, there was stability in the wage bill.

Collection by telephone

Due to the Covid-19 pandemic, and in compliance with guidance from the Ministry of Health, the IBGE has interrupted on site data collection on March 17, 2020. Since then, a contingency plan has been implemented in order to guarantee proper data collection by telephone.

The response rate for Continuous PNAD in March 2020 was 61.3% (in January it was 88.4% and, in February, 87.9%). Considering that performance, analyses took place about the impact on the unemployment rate and the average usual earnings, and there was not significant record of increase in coefficients of variation, which made it possible to release data in the first quarter of 2020.

The telephone numbers of the housing units previously visited by the IBGE were already listed in the Continuous PNAD database. With the pairing of the list of housing units with data available in the Institute and several actions promoted in the 27 states, it has been possible to obtain the telephone numbers needed for the survey.

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