Our View: Today’s data reinforce the scenario of a still strong labor market but with more evident signs of deceleration. The intensification of the economic activity slowdown should accentuate these signals in the upcoming releases, even though the decline in the workforce mitigates, to some extent, the effect on the unemployment rate.
Unemployment rate of 7.7% in the quarter ending in September, is in line with what we and the market expected. The composition was less favorable than we expected, with lower year-on-year employment growth (0.6%).
It is worth noting the deceleration in this metric in most segments of the employed population (private employment, public employment, informal employment, domestic employment, employers).On a month-to-month basis, employment recorded its first decline since December 2022, and the participation rate fell again, explained by the smaller workforce. Earnings continue to accelerate at the forefront but have remained below 5% in year-on-year terms. It is important to monitor, but for now, the risk of inflation acceleration seems well-contained coming from this channel.
