Leading employment indicator retreats and indicates challenges – 05/04/2023 – Market

The Leading Employment Indicator in Brazil fell in April after two months of highs, indicating a challenging year for the job market in 2023, according to data released this Thursday (4th) by FGV (Fundação Getulio Vargas).

The IAEmp, which anticipates the direction of the market in Brazil, fell 1.4 points in April and reached 75.0 points.

“Despite closing the first quarter with a positive result, the April result returns almost all of the quarter’s gains and keeps the IAEmp oscillating at a low level”, said in a note Rodolpho Tobler, economist at FGV Ibre.

“After a very favorable year for the labor market, 2023 should be a more challenging year dictated by the ongoing global economic slowdown, related to a restrictive monetary policy and inflation”, he added.

Tobler highlighted that the indicator is currently ten points below the historical average, and that for this reason “it is not possible to imagine a return to the positive trajectory in the pace of hiring in the short term”.

The IAEmp shows that four of its seven components fell, with emphasis on the Business Trend and Current Business Situation indicators, both for Industry, which contributed with -1.0 and -0.4 points.