Overview
- Data this week show prices for labor-intensive services rose 7.44% in the 12 months to September, their highest rate since 2017 and well above the 4.58% overall IPCA for the same period.
- The IPCA-15 reading for October rose 0.32% month-on-month and lifted the 12-month figure to 4.62%, which sits above the central bank's 4.5% tolerance ceiling.
- Warren Investimentos estimates that labor-intensive services added about 0.47 percentage point to the 4.58% IPCA, meaning this roughly 6%‑weight subgroup accounted for roughly 10% of cumulative inflation.
- Labor market tightness is a key driver: unemployment is near record lows at 5.3% and real average wages rose about 3.7% year-on-year, supporting demand and allowing providers to pass higher labor costs to prices.
- Analysts warn these service-price pressures, together with mixed moves across components like a big fall in airfares, point to persistent inflationary inertia that will likely keep monetary policy more restrictive unless fiscal credibility improves.