Business confidence in the economy is declining. A Getulio Vargas (FGV) survey showed that in March, it reached its worst level since July of last year. And according to economists who heard The People Newspaper, This frustration may slow down the pace of new formal contract employment opportunities.
In addition to intensifying the trend of slowing down in the level of activity already observed in the previous months, there was a significant increase in pessimism regarding the coming months, which affected sales and employment prospects. Confidence in trade has dwindled, falling below service confidence, which was already very low in February, ”says Aloisio Campelo Jr., Supervisor of Statistics at the Brazilian Institute of Economics (Ibre / FGV).
According to the National Federation of Commodity Trade. Services and Tourism (CNC) Traders’ confidence declined, in March, for the fourth month in a row, due to the delay in immunizing the population and the payment of social benefits, and the fact that the economy is not in good shape yet. The take-off stage.
The first two months
The first two months of the year were great for anyone looking for a job opportunity. 659,800 official jobs were opened, an increase of 92.1% over the same period in 2020, according to the new public record for employed and unemployed people (Caged).
In those months, there were more optimistic forecasts for the economy. It was the effect of the “new normal”. The companies saw the effectiveness of the home office, and at the same time, many people eased their care for the epidemic, ”explains Ettore Sanchez, chief economist at Ativa Investimentos.
Economist Lucas Assis of Tendencies says the situation for a rapid resumption of formal employment depends on expansion in employment, in light of the gradual reaction to indicators of economic activity, and in the slowdown of dismissals, based on the strong adherence of companies to emergency benefits (Bem), in the past year Which had long-lasting effects until the beginning of 2021.
Expansion in employment has been widespread across all sectors, but one of the biggest contributors has been services. Companies created 253.5 thousand opportunities, an increase of 26.47% compared to the same months in 2020. “We did not have the same amount of restrictions on the movement of people in January and February,” adds Carlos Pedroso, chief economist at MUFG Brasil.
Trends of the year
However, the outlook for the coming months is not favorable. Ativa Investimentos predicts that throughout the year, 1 million vacancies in the official market will be filled, meaning more than 340,000 official jobs through December, after the dismissals are deducted.
“For the months of March and April, the worsening of the epidemic and the consequent measures to restrict economic activity, as suggested by indicators of confidence and mobility, should translate into a slower pace of job creation,” says Bradesco economists.
According to Assis, in the second quarter of 2021, a slowdown in the opening of formal jobs in the country is expected. “The cautious approach of the formal labor market is based on a scenario of high uncertainty among agents, poor performance of large sectors, a reduction in the size of counter-cyclical fiscal and monetary policies, an exacerbation of the pandemic, along with a slowdown in the vaccination process,” he says.
A better job market scenario, according to Pedroso, would depend on a faster pace of vaccination. Only then will we have the minimum level of control over the epidemic. “
According to Our World in Data website, from the University of Oxford (UK), 6.58% of the Brazilian population had received at least one dose of the vaccine by March 30th. In the United States, this percentage was 28.72%.
Lack of jobs
Even with the recovery of formal employment, unemployment remains high. It was 14.2% on average for the quarter ending in January, according to a survey by the Brazilian Institute of Geography and Statistics (IBGE). A year ago, it was 11.2%.
The trend is that these numbers will increase in the coming months. One of the reasons, according to MUFG Brasil’s chief economist, is the decrease in the amount of emergency assistance in its third round, which starts to be paid out on the sixth day.
“The value is not encouraging people to stay at home. They will look for jobs,” Pedroso says. The unemployment rate is calculated on the basis of the job search. Thus, the more people are looking for jobs, the higher the rate.
Another reason is the newcomers to the job market. “The unemployment rate may reach 16% in the second quarter in the scenario of reduced job supply,” Pedroso explains.
According to him, a more advanced stage of vaccination in the second half of this year opens the way for more flexibility in restrictive measures, which will allow for a gradual recovery of the economy, and thus a decrease in the unemployment rate to levels close to 13% at the end of the year. The year.
“Only in the second half of the year should the effects on corporate revenues be mitigated by easing measures of social isolation and a gradual return to the level of economic activity,” Assis predicts, of Tendencies.