Labor Market slows down despite optimism of entrepreneurs, according to IBRE

Brazilian businesspeople are more optimistic and satisfied with the current situation of businesses. That's what the last poll of the Leading Indicator of Employment (IAEmp) indicates - conducted by the Brazilian Institute of Economics (IBRE) of Fundação Getulio Vargas.IAEmp advanced 2.6% in August, compared to the previous month, considering seasonal adjusted data. The result represents a settlement after declines of 1.3% and 5.7 %, in June and July, respectively.The factors that most contributed to IAEmp's increase were the indicators that measure the expectations of entrepreneurs in relation to business' trends and the current level of satisfaction with the current situation - both from the Services Survey - with changes of 12.8% and 4.4%, respectively. However, the result does not change the deceleration trend in the hiring pace of the Brazilian economy observed since last April.IAEmp is composed of a combination of series extracted from the Industry, Services and Consumer Surveys, and is capable of predicting the direction of the labor market in the country.Labor market situation is still criticalThe Coincident Indicator of Unemployment (ICD) indicated a decrease of 2.3% in August, compared to the previous month, also considering seasonal adjustments. The result signals a settlement after the strong increase noted in the previous month (7.2%). Expressed in quarterly moving averages, the ICD indicates a gradual deterioration of the labor market in the second half of 2013.The ICD is composed of the data broken down into four categories of family income from the question of Consumer Survey, which seeks to capture the perception about the present situation of the labor market. The income category that most contributed to the reduction of the ICD in August was exactly the one that had contributed the most to the increase of the previous month: consumers with family income up to BRL 2,100.00, whose Employment Indicator (inverted) presented a change of -8.1%.
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