Falling Unemployment Highlights Robust Recovery

The strong economic recovery in Brazil in the second part of 2009 saw the registered unemployment rate drop off at a more pronounced rate since August. We initially estimated an unemployment figure of 8.0% for 2009. However, after falling from 8.1% in August to 7.4% in November, we estimate the headline figure to be closer to 7.3% by end-2009. Given that unemployment is traditionally a lagging indicator the improvement in the labour market is testament to the robust recovery in the Brazilian economy. We also highlight that in light of the country's highly rigid labour market, rising demand for labour further underpins our expectations for a robust economic trajectory this year.

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