Brazil Unemployment Starts Looking 'Brazilian' Again

http://www.forbes.com/sites/kenrapoza/2015/04/09/brazil-unemployment-starts-looking-brazilian-again/

Unemployment is on the rise in Brazil as inflation, an oil scandal and a political impasse in Brasilia are all pulling the rug out from a once red hot job market.

For years, Brazil’s unemployment broke historic records.  Until earlier this year, unemployment was steady at around 5.3%.  But, ongoing layoffs at construction firms caught in the Petrobras corruption scandal have pushed unemployment to 7.4% in the first quarter.  That’s up from 6.8% in the previous quarter, and on par with the 7.4% reached in June 2013.  It’s official then, Brazil’s job market is flat-lined.

Economists have been forecasting job market erosion since 2012, when a weakening economy and lackluster investment by local companies called into question Brazil’s near full-employment.  Back then, unemployment levels were under 5% in some quarters.

Now that the economy expected to contract 1% this year, and with at least two major Petrobras affiliated construction firms going belly up because of forced work stoppages on government contracts, job numbers will start to look more historically Brazilian…closer to 10% than to Chinese style numbers of just 4%.

More layoffs are likely in construction.  At least 35,000 workers have been laid off this year in the sector.