Weekly Report 144
A resilient labor market and a turbulent international backdrop mark the start of the year – 01/09
The week brought signs of a gradual slowdown in economic activity, without abrupt movements, while inflation ended the year on a cooling trajectory, closing below the upper bound of the target and in line with market expectations. Industrial Production reinforced the cooling narrative, particularly due to its negative composition, while the labor market remains resilient, with the PNAD recording a new record low in the unemployment rate, keeping employment as a key point of attention for inflation. December’s IPCA came in as expected, but with a still challenging composition, marked by pressures in underlying services and industrial goods, confirming the inflation slowdown in 2025 without, for now, changing expectations for the start of the interest rate cutting cycle.
On the international front, the week combined signs of an orderly deceleration in the U.S. labor market with heightened geopolitical tensions. U.S. data—ADP, JOLTS, and payroll—pointed to a gradual moderation in employment, without evidence of risks of abrupt deterioration , supported by services while goods remain under pressure, reinforcing expectations of interest rate maintenance at the January meeting. At the same time, the Services ISM surprised positively, indicating resilient demand. On the political front, more assertive U.S. actions toward Venezuela, including signs of conditional cooperation and agreements involving oil, added geopolitical uncertainty, still without a significant impact on commodity prices. In Europe, the highlight was the approval of the European Union–Mercosur agreement, despite French resistance, paving the way for the formal signing of the treaty
