Brazil’s unemployment rate fell to 5.3% in the three months through July, the lowest level for a July-end period since the official series began in 2012, government data showed on Thursday. The figure compares with 5.8% in the prior quarter and 5.6% a year earlier, the national statistics agency IBGE reported.
The number of unemployed people decreased by 8% from the previous quarter to 5.8 million, while the employed population rose 1% to a record 103.3 million. The labor force underutilization rate declined to 13% from 13.8% in the prior quarter and 14.1% a year ago, totaling 14.9 million people.
Average real habitual income held steady at 3,762 reais in the quarter, up 3.3% from a year earlier, while total wage mass reached a record 383.5 billion reais, an increase of 4.1% over 12 months. Formal employment in the private sector reached 39.4 million, while informal workers rose 3.6% from the prior quarter to 13.8 million, lifting the informality rate to 37.5%.
The central bank’s monetary policy committee, Copom, has cut the benchmark Selic rate by 25 basis points in each of the past four meetings, bringing it to 14% in August. The next policy decision is scheduled for September 16. Analysts at XP and Daycoval project the jobless rate will end 2026 near 5.6%, while Suno Research forecasts 5.2%. XP expects unemployment to rise to 6.5% in 2027 due to lagged effects of high interest rates and credit tightening.
Economists cited a still-tight labor market despite signs of moderation. Antonio Ricciardi of Banco Daycoval noted the market remains heated but cooling gradually, while Rodolfo Margato of XP said the data reinforce a robust labor market outlook with only modest deceleration. Rafael Perez of Suno Research warned that historically low unemployment and record wage mass could slow disinflation in services and demand-sensitive components.
