Brazil Jobless Rate Falls to 5.2% as Markets Push Back Selic-Cut Bets

Overview

• IBGE reported unemployment at 5.2% in the quarter to November, the series low, with record employment, record average income of R$ 3,574 and a record mass of earnings.
• Futures pricing now implies only about 7 basis points of easing for the January Copom, signaling low odds of a move, with a cautious 0.25 point cut shifted to March.
• Short-end interest rates rose after the labor release, the dollar traded around R$ 5.57–5.58 in thin year-end sessions, and the Ibovespa struggled to hold 160,000 points.
• Fiscal data worsened in November: the Government Central posted a R$ 20.2 billion primary deficit and the consolidated public sector a R$ 14.4 billion shortfall, with the nominal deficit at R$ 1.027 trillion in 12 months and interest expenses of R$ 87.2 billion in the month.
• Public debt metrics deteriorated as the gross debt reached 79.0% of GDP and surpassed R$ 10 trillion, while the latest Focus survey showed inflation expectations easing to 4.32% for 2025 and 4.05% for 2026 and GDP growth at 2.26% for 2025, with the Selic ending 2025 at 15%.