Brazil unemployment hits record low amid shifting economic forecasts

Brazil's labor market has shown significant resilience, with the unemployment rate falling to a period-low of 5.3% for the three months ending in July. According to the Brazilian Institute of Geography and Statistics (IBGE), the employed population reached a record high of 103.3 million people. The construction sector was a primary driver of this growth, adding 371,000 jobs.

Despite these employment gains, financial markets have adjusted their economic outlooks. A Focus Report from the Central Bank of Brazil indicates that financial institutions have lowered their 2026 GDP growth projections from 1.95% to 1.92%. While 2026 inflation expectations were slightly reduced to 5.01% due to easing price pressures in electricity, food, and transport, expectations for 2027 inflation rose slightly to 4.28%.