This Thursday, the Public Finance Council (CFP) kept its unemployment rate estimate unchanged at 6.4% this year, forecasting a gradual decline to 6% in 2027.
In a report updating the 2023-2027 labor market economic and fiscal outlook, the CFP revises 2023 job creation prospects upward by one percentage point, to 1.2%, while “the unemployment rate should remain unchanged at 6.4% active population.”
The organization led by Nazaré da Costa Cabral is therefore more optimistic than the government, which in the Stability Program presented in April predicted an unemployment rate of 6.7% this year.
According to CFP, “in the coming years, the rate of job creation should approach zero, and the unemployment rate should gradually decline to 6.0%, reflecting demographic dynamics.”
“As a result of the upward revision of the active population growth hypothesis, the current macroeconomic scenario reflects favorably the situation on the labor market,” CFP emphasizes.
The outlook for the evolution of average wages per worker was also revised upward by 2.2 percentage points to 8.5%, a value that is “above apparent labor productivity and inflation,” CFP said.
However, despite average wage growth, “nominal disposable income is expected to decline in 2023 as job creation falls,” which should be reflected in lower savings rates, “already at historically low levels in 2022.” marking the depletion of savings accumulated during the post-pandemic recovery process,” the organization said.
CFP estimates average wage growth per worker to be 4.7% by 2024.