• Highlights

• Over 1.3 million persons lined up for a job in Brazil in the third quarter compared to the second quarter.
• The unemployment rate rose in ten states and remained stable in the rest. Bahia (20.7%) had the highest rate and Santa Catarina (6.6%), the lowest.
• Unemployment rate was 12.8% for men and 16.8% for women.
• The number of employed persons decreased to 82.5 million persons, and the employment-to-population ratio was 47.1%.
• The number of persons with a formal contract fell 2.6% in the third quarter compared to the previous one, with a loss of 790 thousand jobs.
• The informality rate (38.4%) corresponds to 31.6 million persons.
• Employment increased only in construction and agriculture.
• Underutilization rate was higher in Alagoas (49.3%), Maranhão (47.1%) and Sergipe (46.3%).

The unemployment rate reached 14.6% in the third quarter of the year, an increase of 1.3 percentage points in comparison with the previous quarter (13.3%). This is the highest rate recorded in the IBGE time series, which started in 2012, and corresponds to 14.1 million persons. In other words, another 1.3 million unemployed lined up for a job in Brazil.

In the period, the unemployment rate rose in ten states and remained stable in the rest. The highest rates were in Bahia (20.7%), Sergipe (20.3%) and Alagoas (20.0%). The lowest was registered in Santa Catarina (6.6%). The greatest increases in the unemployment rate were registered in Paraíba (4 pp), Amapá (3.8 pp) and Pernambuco (3.8 pp). The data are from the National Continuous Household Sample Survey (Continuous PNAD), released today (27) by the IBGE.

According to the survey analyst, Adriana Beringuy, the increase in the unemployment rate reflects the relaxation of social isolation measures to control the Covid-19 pandemic. “There was more pressure on the job market in the third quarter. In April and May, social distancing still influenced people's decision not to look for work. With the relaxation of these measures, we could see a larger contingent of people looking for an occupation”, she explains.

The number of employed persons decreased 1.1% in comparison with the second quarter, totaling 82.5 million persons, the lowest level in the time series started in 2012. There was a retraction of 883 thousand persons. As a result, the employment-to-population ratio was 47.1%, also the lowest in the series, a decrease of 0.8 percentage points compared to the previous quarter (47.9%). Since the quarter ended in May, the employment-to-population ratio has been below 50%, which indicates that less than half of the population of working age is employed in the country.

Ms. Beringuy states that all categories lost employment, and the number of persons with a formal contract fell 2.6% in the third quarter compared to the previous one, with a loss of 788 thousand jobs, totaling 29.4 million formal employees in the country .

The percentage of employees with a formal contract was 76.5% of employees in the private sector. The highest percentages were in Santa Catarina (90.5%), Paraná (85.1%), Rio Grande do Sul (84.3%) and São Paulo (82.3%) and the lowest in Maranhão (51.3 %), Pará (53.9%) and Piauí (54.1%).

The informality rate was 38.4% in the quarter ended in September, which is equivalent to 31.6 million persons without a formal contract (employees of the private sector or domestic workers), or without CNPJ (employers or self-employed) or even unpaid workers. In the previous quarter, this percentage was 36.9%.

Employment grows only in construction and agriculture

Only construction and agriculture activities had a growth in the employed population in the third quarter. In construction, the increase was 7.5%, which represents 399 thousand more persons working in the sector. In agriculture, the increase was 3.8%, with over 304 thousand workers.

“Construction activity was the one that increased most in the period. This is because bricklayers or other self-employed workers, who had withdrawn from the market due to social distancing, returned in the third quarter with the reopening of activities and the demand for small works, such as real estate improvements”, explains Adriana Beringuy.

The survey analyst adds that in agriculture, the rise in employment may be related to the seasonality of cultivation. “Agriculture, in general, has a different rhythm than other activities. In addition, the sector suffered less from the effects of the pandemic, as it is an activity located in the countryside, where the impact of social distancing was smaller than in the city”, says Ms. Beringuy.

Unemployment reaches 17.9% in the Northeast, while in the South it is 9.4%

In the third quarter, the unemployment rate reached a record 17.9% in the Northeast, the highest number among the Major Regions. The South had the lowest rate among them: 9.4%. In relation to the Federation Units, the highest unemployment rates were also in the Northeast, while the southern states had the lowest.

“The unemployment rate, in the quarterly comparison, rose in ten Federation Units, remaining stable in the others. In other words, no Federation Unit in Brazil was capable of decreasing this rate in the third quarter. This shows that all states had, in some way, the labor market quite affected”, explains Ms. Beringuy

Unemployment rate is higher among women and blacks and browns

The survey points to a difference in the unemployment rate between men and women. The percentage was 12.8% for men and 16.8% for women. Among black persons, the rate was 19.1%, while that of browns was 16.5%, both above the national average. The lowest rate was that of whites: 11.8%.

For the survey analyst, these data indicate a continuity of a structural distinction. “We have been seeing that blacks and browns have a higher unemployment rate and this can be linked to the low schooling level related to this population and also of a higher amount of persons out of the workforce in this population. It is more like a continuity of a process that already exists and that sometimes becomes evident and sometimes it does not. But structurally, the difference remains”, says Beringuy.

Youngsters also had the highest unemployment rate among age groups in the third quarter. Persons aged 14 to 17 (44.2%) and 18 to 24 years of age (31.4%) had a rate above the national average (14.6%).

Alagoas has the highest labor underutilization; Santa Catarina, the lowest

The composite rate of labor underutilization, which is the percentage of unemployment, time-related unemployment and the potential workforce in relation to the expanded workforce, was higher in Alagoas (49.3%), followed by Maranhão (47.1%) and Sergipe (46.3%). The only states in which the unemployment rate was below 20% were Santa Catarina (12.7%) and Mato Grosso (18.7%).

“The rate of labor underutilization continues to grow, with a scenario where the Federation Units in the Northeast have the highest rates and those in the South, the lowest. This is related to the structure of the local labor market in those areas”, explains the survey analyst.

According to the researcher, in the Northeast there are many persons who are in the potential workforce, that is, they are not putting the labor market under pressure, but they do have the potential to be part of it. “Often, the market itself, the local economic structure, does not absorb these people. The issue of underutilization in the Northeast has to do with the economic characteristics of the region itself, where there is a lot of informal work and many persons out of the workforce. This ends up raising this indicator in this region”, she concludes.