This page has been archived and commenting is disabled.
Brazil's Economy Is Now A Job Destruction Machine
In more ways than one (or two, or three) Brazil is the poster child for the global emerging market unwind that, thanks to China’s yuan devaluation, has accelerated dramatically over the course of the last week.
To be sure, the combination of slowing demand from China, the (now lower) possibility of a Fed rate hike, and, perhaps most importantly, the end of the commodities supercycle which has seen prices crash to their lowest levels of the 21st century, would be more than enough to put Latin America’s most important economy into a tailspin.
But unfortunately, a political crisis stemming from allegations of fiscal book cooking and corruption charges tied to Petrobras where President Dilma Rousseff was chairwoman for seven years have exacerbated the country’s woes and recently, Brazilians went (back) to the streets by the hundreds of thousands to call for Rousseff’s impeachment.

The fallout for the real economy has been catastrophic and indeed Brazilians suffered through the worst growth-inflation outcome (i.e. stagflation) in over a decade during Q2. Whether or not Rousseff can survive (politically speaking, we hope) and whether or not the government can hit primary fiscal surplus targets is an open question, but as we noted on Thursday, the populace is under tremendous pressure in the meantime with unemployment rising for a seventh consecutive month and soaring to its highest level in half a decade in July.
On that note, we bring you the following chart and commentary from Barclays which underscores precisely what we said last month, namely that Brazil may well be in the midst a depression:
In July, 157,905 jobs were eliminated in Brazil, compared to the creation of 11,796 positions in July 2014, according to data from CAGED, Brazil's employment register. Year-to-date, 547,738 job positions have been eliminated (versus the creation of 504,914 jobs in the same period of 2014). In seasonally adjusted terms, today’s print is compatible with 140,939 job eliminations, pretty close to the historical low of -154,355 in June (Figure 1).
Sector-wise, the industrial and retail sectors accumulate the largest job eliminations, which together sums up to 454k. The construction sector follows with a job destruction of 152k, and the only positive highlight is the agricultural sector, which created 99k formal jobs (Figure 2).
The magnitude of the deterioration of the labor market continues to surprise in Brazil. This week the unemployment rate rose by the fastest pace in the historical series, with the data showing that even more people are looking for job positions, however without finding them (see Brazil unemployment rate: Increased pace of deterioration).
The consequence of this is an even more prolonged recession, as disposable income falls and household consumption contracts. Coupled with business confidence indexes for August showing further drops to minimum-lows, this suggests that the worst in terms of growth is still ahead of us.
Which means that BofAML is exactly right to say that out of all the charts one cares to examine for Brazil, the most important one may ultimately be this:
- 27078 reads
- Printer-friendly version
- Send to friend
- advertisements -




Hubris -- Brazil thought it was a playa...
World Cup. Olympics. How costly?
Bye Bye Brasil - a good movie that comes to mind:
http://www.imdb.com/title/tt0080482/?ref_=fn_al_tt_1
Ha! In the category of jobs destruction...
Compared to the Obozo Admin...
The Rousseff Admin are rank amateurs!
Brazil is not in a depression, they're in a recovery.
Yes, at least Brazil publishes something resembling accurate data...not so much here in the land of the freeloaders and the home of the depraved.
Forward! (into the abyss, bitchez!)
That riot looks like a beach party.
The result is always the same with socialism-statism. Some countries do it a tad better than others but the result will be the same whether Greece, Brazil or Venezuela.
You know what BRICS do when you throw them in the water. Western oligarchs gooooaaaaallllll.
The state of the economy is characteristic of the end of the commodities cycle combined with the mismanagement that comes from having >40% of the active workforce in public sector jobs.
The talk of impeachment and protests are result of a combination of State Department sponsored colour revolution and the fact scapegoating is a national sport.
Kidding, right?
Dildo Rudolph's approval rate is 8%.
Your own figure is that more than 40% of the workforce draws its sustenance from the government tit- plus we need to consider all of the relatives of those employees on top of that number.
Man, that State Department of ours is one unstoppable revolution machine to get that many political appointees to hate the person who gave them their soft government job. MK-ULTRA rolls on.
+ 1 for rationality
EDIT: I forgot to mention President Dilma in my comment above. She is the worst of a fairly bad lot of Socialists there.
The approval rate is a direct consequence of the factors I mentioned above. And depend above else of "who" runs the polls, as well as the populace's ignorance to blame the government for the downturn in commodities.
Public sector jobs in Brazil are for life. This created a ratchet effect by which the public sector only grows, irrespective of which government is in power.
As far as the influence of StateDept's NED in South American politics, I won't bother arguing with you, giving your clear pro-zionist, pro-empire stance.
1 Ounce Silver Vienna Philharmonic €13 @ EurGold
https://www.eurgold.eu/silver/vienna-philharmonic-1oz-silver-coin-1-50-e...
This is what happens when you elect a known Communist leader and a radical left party.
You see what happens Dilma!
https://youtu.be/DZV_vpkVTNA
When all the world's central banks coordinate their activities, there can be no other result than a world wide financial crash. It's like fireworks going off in the sky. Boom. Boom. Boom. Then the last BOOOM when the USSA blows up. I think Michael Synder counted 20 the last time. There's about 170 to go.
Good thing everything is OK in the USSA. Stocks had the 10% correction that hasn't happened in four years and now the futures are bright green. Remember BTFD.
The guillotines are hiring.
Zion is a scheme, not an ethnicity.
The Truth About Israhell and Palestine
https://www.youtube.com/watch?v=iKzlh9kN4HI
Islam is the religion of Peace.
OMG TY
Can you imagine doing a triathalon in a septic tank? WTF The Elites really took this one to the edge cause they like the Rio G strings... Country will be bankrupt by then so we all know how this is going to end
Sincerely,
Swimmin with the terds
Just add "fecal" in front of any swimming-related event.
Take the Fecal Medley Relay for example: The Peestroke, The Poostroke, The Shartstroke, and The Thai Chilli Nightmare.
Brazil....dey got dat booty! At least the girls do...mmmhmmm.
Long Brazilian booties....short soccer balls.
Please read! They are about to try and assassinate Obama! This will be the start of World 3! Everyone now pray for Obama ! All who care!
They got Kennedy before a second term .... they got Bobby before a first term .... taking Obama out at the end of a second term .... is kind of stupid .... unless the left wants to create a huge sympathy bubble for the charismatic Hillary .... or perhaps an Obiden insertion .... maybe you´ve got a point ?
How about Canada and Australia having lived solely off resources, what left enormous property bubbles to be cleared.
Brazil and Russia .... vast forests .... bad toilet paper !