Labour market improvements increase confidence levels

After measures taken by Brazilian government that helped put the public budget in order and bring down inflation and interest rates, Brazilians are beginning to feel more confident and satisfied with their lives. The data comes from a survey that shows perceptions have improved and workers have even more reason to be optimistic. The expectation of specialists is for strong job creation this and next year, a movement driven mainly by the positions with a formal contract.

The survey, published by Itaú Unibanco and signed by the institution's chief economist, Mário Mesquita, projects a drop of almost 1% in the unemployment rate - from the current 12.6% to 11.7% - by the end of the year. In 2019, joblessness is forecast to go down further to 10.7%. If the bank's forecast is realised, it will mean millions more Brazilians with jobs and income.

Another survey, this one by the National Confederation of Industry (CNI), reinforces this scenario. It shows that Brazilians are more satisfied with life and more confident in maintaining their own job. Compared with June 2016, when the fear of unemployment was stronger, the concern indicator fell by 6.04%. The survey creates a score for how a issue is perceived; in the case of unemployment, the more it falls, the better.

More confidence

The same CNI survey verified that the confidence index went from 65.6 points to 67.5. For Brazilians between 30 and 39 years of age, the increase was of 4.14%; for those between 40 and 49, it advanced 4.59%.

According to the president of the National Confederation of Shopkeepers (CNDL), José Cesar da Costa, the recovery of economic activity has gradually consolidated, leading to more consumer confidence and more consumption, which in turn helps to turn the economy around. "With improved levels of income, employment and defaults on debts, the recovery will make consumer confidence show more expressive results," he said.

Newton Marques, a graduate professor at the University of Brasília (UnB) and a member of the Regional Economic Council of the Federal District, estimates that trade will be the first to feel the benefits of economic recovery. As consumption increases, industry demand grows and a positive cycle begins, he explained, adding that "from there on, the positive impacts begin to reach various sectors of the economy".