Labor market continues to grow despite economic downturn, IBRE says

Institutional
09 July 2013

The Employment Anticipation Index (IAEmp), executed by the Brazilian Institute of Economics (IBRE) of Fundação Getulio Vargas decreased 1.3% in June, compared to the previous month, taking seasonally adjusted data in consideration. Nevertheless, the labor market remains strong, according to FGV's economist Fernando de Holanda Barbosa Filho. The researcher says that, after a slight increase of the indicator in May, the market has hired less because the positions are already occupied and there was a decrease in the number of people seeking employment. The labor market remains strong, although we are creating fewer positions than before, since we created a lot of jobs for a long time while unemployment was high, he explains. Fernando believes that it is unfeasible to maintain the pace of hiring 2.5 million people, compared to 2010. Also according to him, in order to increase hiring, the economy needs to be leveraged and payroll tax reductions will reflect, at the present moment, in wage gains, but not in new jobs.