Buoyant labor market is not an indication of growth, according to IBRE

The researcher Rodrigo Leandro de Moura claims that consumption should grow less this year and demand for jobs should decrease, strengthening a movement that has already been occurring due to the decrease of the difference between the economically active population (PEA) and the working-age population (PIA).
Institucional
04 Fevereiro 2014

The low unemployment rate recorded in Brazil in early 2014 cannot be viewed so positively. That is what experts of the Brazilian Institute of Economics (FGV/IBRE) indicate.IBRE indicators show that the scenario for the labor market no longer looks so favorable. Moreover, real payroll has recorded slower growth than in previous years and the number of jobs has shown more modest growth.Faced with this scenario, the researcher Rodrigo Leandro de Moura claims that consumption should grow less this year and demand for jobs should decrease, strengthening a movement that has already been occurring due to the decrease of the difference between the economically active population (PEA) and the working-age population (PIA). However, Moura believes that the market has a chance to recover. The outlook for 2014 is that employment and income indicators will still remain heated, due to the favorable seasonality of the World Cup, he stressed.IndustryThe sector that showed a weaker growth in the number of jobs was the industry, which has been dismissing workers for some time. Despite the government's incentive policies, the trend is that the industry will lose space for services and trade next year, Rodrigo Moura pointed out. According to him, only after 2015 - when the new president should take greater austerity measures - it will be possible to know whether the labor market will suffer from the new economic agenda.The economist also points out that fiscal adjustments are needed to improve the economy, despite having a negative effect on the labor market in the short term. This will lead to less income growth and rising unemployment in 2015, but it is important that the government takes measure to raise labor productivity, so that in the medium and long terms we may grow more and that further increases in real income can be justified, he concluded.

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