Brazil labor market shows mixed trends as retail sector faces job cuts

Data from the FGV IBRE Labor Market Survey for the quarter ending July 2026 indicates that a majority of Brazilian workers feel secure in their employment. Approximately 59.3% of respondents stated it is unlikely or very unlikely they will lose their primary source of income in the next six months, a 4.9% increase compared to the same period in 2025. Rodolpho Tobler, deputy superintendent of FGV IBRE, noted that the results reflect a heated labor market with historically low unemployment rates.

In contrast, the retail sector is facing significant challenges, having eliminated 45,900 formal jobs during the first half of 2026. This represents the sector's worst performance for this period since the pandemic. Factors contributing to this decline include high interest rates, reduced family consumption, the expansion of e-commerce, and the rise of online betting, which has diverted funds away from traditional spending on food and clothing.

The crisis is further compounded by major retailers like Casas Bahia, which reported a net loss of R$ 10.1 billion in the second quarter and requested new judicial recovery. This has led to the closure of 298 physical stores and the dismissal of approximately 3,000 employees.