Unemployment drops to 11.1% in fourth quarter, annual average rate is 13.2%
February 24, 2022 09h00 AM | Last Updated: February 25, 2022 11h07 AM
The unemployment rate fell to 11.1% in the fourth quarter, a retreat of 1.5 percentage points in comparison with the previous quarter (12.6%). The annual average rate was 13.2%, which points out to a recovery trend against 2020 (13.8%), a year in which the labor market suffered the greatest impacts of the pandemic caused by the coronavirus. Although the scenario improved in 2021, the pre-Covid level has not recovered yet. In 2019, the annual unemployment rate had been 12.0%. These data can be found in the Continuous National Household Sample Survey (Continuous PNAD), released today (24) by the IBGE.
Adriana Beringuy, the IBGE´s coordinator of Labor and Income, explains that the average unemployment rate of 13.2%, the second highest in the time series of the survey started in 2012, reflects the situation of the labor market in a moment in which unemployment grew once again after one year of intense losses.
“Along these two years, many people lost their jobs and many of them interrupted the search for a job in the beginning of 2020 due to the pandemic. After that, the search for a job resumed, albeit the economic scenario was still quite unfavorable, i.e., the generation of jobs was not high. With the advance in the vaccination and improvement in the scenario in 2021, the number of workers increased, though there is still a large contingent of persons looking for a job,” says her.
That average unemployment rate is equivalent to 13.9 million unemployed persons in Brazil, a contingent that remained stable over the previous year. On the other hand, the workforce, which includes employed and unemployed persons, increased 4.3% in the same period. This growth was impacted by the increase of 5.0% in the employment or 4.3 million persons. In 2021, the employed persons were estimated at 91.3 million.
“It is a year in which some indicators are recovering, though it is the year to overcome losses, even because the pandemic did not end, and its impacts, still underway, affect several economic activities and the workers’ earnings. There is a recovery process, though we are still far from the levels before the pandemic,” states the researcher.
The increase in employment was spread along several economic activities. The highest percentage growth came from construction (13.8%), which employed more 845 thousand persons. Trade, a sector very impacted by the pandemic, gained 5.4% compared with 2020, which represents an increase of 881 thousand persons. Even so, the contingent of workers in that segment remained smaller than in 2019, when 18.1 million persons were employed.
Industry was another activity that could not recover the losses in 2020. In a year, more 3.9% or 446 thousand persons were working in the sector. Compared with 2019, the number of workers dropped 3.1%.
The year of 2021 was also marked by the beginning of the recovery of employment in the services sectors, which, like trade, were very jeopardized by the pandemic. Among them, domestic services stood out, registering the highest percentage increase (6.7% or 327 thousand persons). The segment of lodging and food also advanced 5.4% or more 238 thousand persons.
Informality rate advances to 40.1%
In general, informality expanded with the increase in employment. Last year, informal workers added up to 36.6 million, an increase of 9.9% over 2020. It took the informality rate to rise from 38.3% to 40.1% in that period. Representing the informal market, persons employed without a formal contract in the private sector increased 11.1% and hit 11.2 million persons.
“The growth in the informality shows us the way employment is recovering in Brazil, mainly based on self-employment. The informal population was the one that mostly advanced, both in the second semester of 2020 and along 2021,” states the survey coordinator.
Yet, formal work also grew. Those employed in the private sector with a formal contract expanded 2.6%, hitting 32.9 million persons. In 2020, this category suffered the biggest drop in the time series (-6.9%).
“It was a year in which many enterprises closed their doors and laid off their employees. It is more difficult to recover such job linkage than the informal one. Yet, it is worth highlighting that, among formal workers, the number of self-employed workers with CNPJ hit a record in the time series of the survey, started in 2016 for this indicator.” The total number of self-employed workers (with and without CNPJ) also hit the highest figure in the time series (24.9 million).
Following the growth in the number of employed persons, the employment-population ratio rose to 53.2%. In 2020, this proportion had been 51.2%, the lowest one since 2012, when the time series started. The employment-population ratio points out the percentage of persons at working age who were effectively employed in the period. “It rose in relation to the previous year, though at a level below that of 2019 (56.0%). This happens because we had an employed population of 94.3 million that year, and it declined by nearly 3 million workers in this period (between 2019 and 2021),” highlights Beringuy.
In 2021, the potential workforce fell 13.5% over the previous year. This group includes the persons who were neither employed nor unemployed, but had a potential chance to get a job in the labor market. In 2021, they added up to 10 million. This group includes those discouraged, persons who were available and would like to get a job, but did not look for it. This contingent dropped 3.1%, adding up to 5.3 million. In the previous year, the number of discouraged persons was the highest one in the time series: 5.5 million.
The average earnings received by persons was estimated at R$2,587, a retraction of 7.0% over 2020 or a decrease of R$195. The wage bill also dropped (-2.4% or R$5.6 billion) in this period, being estimated at R$230.6 billion. “The behavior of the wage bill is explained by the drop in the real average earnings an by the advance of inflation. In spite of the growth in the employed population, it was not followed by earnings, i.e., persons who are employed in the labor market have lower compensation, on average,” explains her.
Unemployment rate retreats to 11.1% in the fourth quarter
Having retreated 1.5 p.p. in the fourth quarter, the unemployment rate hit 11.1%, which corresponds to 12 million persons looking for a job. Compared with the quarter ended in September, that figure dropped 10.7% or less 1.4 million unemployed persons. It dropped 16.7% in the comparison with the same period of 2020, a reduction of 2.4 million persons.
“The drop in the fourth quarter was quite significant. This indicator tends to reduce in the last months of the year due to seasonality. Unemployment tends to reduce in this period, due to the bigger absorption of workers in activities like trade and lodging and food. In addition, employment is recovering since August last year,” highlights her.
Compared with the previous quarter, the number of employed persons grew 3.0%, which represents an increase of 2.8 million persons in the labor market. It increased 8.5 million persons when compared with the same period last year. As a result, the employment-population ratio rose to 55.6%.
Part of the increase in employment in the fourth quarter came from formal jobs in the private sector. The number of persons employed with a formal contract rose 2.9% in relation to the previous quarter, which means more 987 thousand persons. Among those without a formal work, the increase was of 6.4% or 753 thousand persons.
Self-employed workers increased by 483 thousand persons (1.9%), whereas domestic workers increased by 341 thousand (6.4%).
Employment increased in most activities, highlighted by trade (3.4% or more 602 thousand persons), other services (11.8% or more 521 thousand persons) and information and communication (3.3% or more 367 thousand persons). As one of the segments with a large number of employed persons (12.4 million), industry remained stable in the fourth quarter.
More about the survey
The Continuous PNAD is the main instrument to monitor workforce in Brazil. The survey sample per quarter corresponds to 211 thousand households surveyed in Brazil. Nearly two thousand interviewers work in the survey in 26 states and in the Federal District, integrated to the data collection network of more than 500 IBGE branches.
Due to the Covid-19 pandemic, the IBGE implemented data collection by telephone on March 17, 2020. The id of the interviewers can be confirmed at the Answering the IBGE website or through the Call Center (0800 7218181) by checking their ID numbers, which can be requested by the informants.