The Leading Indicator of Employment (LIEmp), calculated by FGV’s Brazilian Institute of Economics (IBRE), rose 3.1 points in December, totaling 107 points – the highest level of the series that began in June 2008. With this result, the indicator rose 17 points in 2017 and points towards a continued trend of recovery in the job market in Brazil during the first few months of 2018. 

“The Leading Indicator of Employment (LIEmp) still reflects strong optimism regarding economic recovery in the country. The indicator reflects expectations regarding improved business activities and corporate hiring plans over the next few months. The indicator’s high level indicates that more new job positions should be created this year,” said Fernando de Holanda Barbosa Filho, IBRE economist.

The Coincident Indicator of Unemployment (CIU) rose for the second consecutive month, varying 1.7 points and totaling 100.3 points – the highest level since March 2017 (100.6 points). The indicator dropped 3.3 points in the year.

“Although the Coincident Indicator of Unemployment (CIU) is above the 100-point mark, the result shows that the job market scenario is still murky, despite the lower unemployment rate. The unemployment rate still stands around 12% and the generation of new job positions is still predominantly concentrated in the informal market, which helps maintain a troublesome job market for workers,” said Fernando de Holanda Barbosa Filho. 

LIEmp and CIU Highlights

The LIEmp increase in December was driven by six of the seven components of the indicator, particularly those that gauge the business situation for the next six months, under the Processing Industry Survey, and the current business situation, under the Service Survey, with variations of 9.1 points and 4.4 points in the margin, respectively. 

Similarly to last month, the income classes that most contributed to the CIU’s increase were the bottom two classes: consumers with household income of up to BRL 2,100.00, whose Employment Indicator (inverted) varied 9.5 points; and the income range between BRL 2,100.00 and BRL 4,800.00, which rose 1.1 points.

The next FGV IBRE Job Market Indicators will be published on February 8, 2018. The survey’s results are available on the website.