Labor Market: Slow, but steady improvement
After a disappointing third quarter, the labor market picked up in the fourth quarter, with net creation of an annualized flow of nearly 2 million formal jobs. Although that growth pace cannot be extrapolated to the coming quarters, there are many evidences that the recovery of the job market will continue, which will spur growth of household consumption, the most important force behind the projection for GDP growth of 2.2% in 2020.
In 2019, the net job creation in the formal market amounted to 724 thousand, a significant improvement over the result in 2018, when the corresponding figure was a loss of 300 thousand jobs. The growth of the population without formal employment contracts and self-employed workers was also high, with an increment of 1.1 million people in 2019, the same number as in 2018. This performance lowered the unemployment rate to 11.6% from 12.3% at the start of 2019. The unemployment rate including the underemployed and discouraged contingents is still high and is declining more slowly than the official jobless rate, ending 2019 at around 21.4%. However, wither because the average wages of formal workers are higher than those of their informal peers, or the former enjoy easier access to credit, the improved composition of the job market favors recovery of household consumption. For the first time since 2015, the percentage of consumers who say it is getting harder to find a job has fallen below 90%, which is the level at which this indicator had been stalled since the start of the recovery.
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