Leading Indicator of Employment declines and reaches lowest level since October 2018
The Leading Indicator of Employment (LIEmp) of FGV’s Brazilian Institute of Economics (IBRE) fell by 1.0 point in April, reaching 92.5 points, the lowest level since October 2018. Following its third consecutive fall, the indicator accumulated a loss of 8.6 points. In quarterly moving averages, the indicator fell by 2.9 points, reaching 95.1 points.
“The first results of the second quarter suggest that entrepreneurs are continuing to gauge their expectations regarding the evolution of the labor market for the coming months. The disappointment regarding the pace of economic activity in 2019 and the high level of uncertainty in the country contribute to the return of the index to a level similar to that observed at the end of last year’s election period,” said Rodolpho Tobler, economist at FGV IBRE.
In turn, the Coincident Indicator of Unemployment (CIU) rose by 0.7 points in April, reaching 94.8 points and returning to the level of January 2019. The CIU is an indicator with a signal similar to that of the unemployment rate, that is, the higher the number, the worse the result. In quarterly moving averages, the indicator rose by 0.1 point, reaching 93.7 points, reversing the downward trend of the previous three months.
“The second consecutive increase of the CIU shows that the indicator continues to find resistance in moving away from the 95-point threshold. Even considering that the two recent increases have not yet been sufficient to offset the falls that occurred after the end of the elections, the historically high level of the indicator still suggests that the labor market recovery remains slow,” continued Rodolpho Tobler.
Six of the seven components of the LIEmp reported a negative variation between March and April. The indicator that most contributed to the decline of the LIEmp was the one that reflects the prospects of the current business situation of the Services sector, with a negative variation of 3.6 points in the margin. In the same period, the (Inverted) Indicator of Employment for consumers in the household income range from R$ 2,100.00 and R$ 4,800.00 were the ones that most contributed to the increase in the CIU, varying by 3.5 points.
The full study is available on the website.