Number of formal jobs increases in April in Brazil

According to the General Register of Employed and Unemployed (Caged), the Brazilian labor market has created 129,600 formal jobs and has the best April of the last 6 years. However, before April 2019, unemployment has increased in Brazil and vacancies, when they arise, are mostly for informal, precarious and low-wage occupations.

With more than 66,000 hirings, the services sector was the main driver of this performance in April.

Caged is not research on the job market. It is a record that companies are required to provide every month to the Ministry of Economy. The numbers sent to the government, therefore, contain the total number of hirings and dismissals of Brazilian companies.

However, hiring wages for April 2019 were lower than the salaries paid to those hired in April 2018.

The industry with the greatest difficulty in recovering is the industry, where jobs with better salaries are placed. So far the current government has not presented any measure aimed at job creation. The only government agenda so far has been the Pension Reform.

The dollar value continues to grow in Brazil and end the day at R$ 4.0360

The trading session of the São Paulo Stock Exchange (Bovespa) closed with the dollar rising 0.47%, quoted at R$ 4.0360. In the previous trading session, on May 24, the currency was quoted at R$ 4.0170.

The support of thousands of protesters in various Brazilian cities in favor of Pension Reform and Jair Bolsonaro's government helped to optimize the Brazilian financial market. However, the demonstrations that took place on Sunday, May 26, were smaller than the demonstrations against the cuts made by the current government in the area of education, which occurred on May 15.

Among protesters who took to the streets to defend the government, there were criticisms against the Congress, the political establishment, and specially directed to the president of the Brazilian Chamber of Deputies, Rodrigo Maia (DEM-RJ).

The US political risk consultancy Eurasia evaluates that the actions in defense of Jair Bolsonaro can be positive for the advance of the Pension Reform.

Many analysts believe that this sequence of major anti-government and pro-government demonstrations points to a major political division in the country, which could become more acute if demonstrations continue to grow. The next demonstration against the government is scheduled for May 30.

Brazilian construction sector confidence falls in May

According to the Getulio Vargas Foundation (FGV) reported today, the confidence of the construction sector fell 1.8 points in May compared to April, reaching 80.7 points.

The average price of residential real estate in Brazil rose more than the level of sectoral inflation measured by the National Construction Cost Index (INCC), according to a survey conducted by the Brazilian Chamber of Construction Industry (CBIC).

Despite this scenario of lack of confidence and rising real estate prices, the Brazilian Chamber of Construction Industry (CBIC) believes that sales and launches of residential real estate in the country are expected to grow around 10% to 15% in 2019.

GDP growth projections in Brazil fall for the thirteenth consecutive time

Financial market analysts heard by the Brazilian central bank downgraded by 0.01 percentage point the forecast for Brazil's Gross Domestic Product (GDP) in 2019. According to the Focus Bulletin, released today, May 27, the Brazilian economy should move forward 1.23% in 2019. Last week, the forecast was 1.24%.

The Focus Bulletin is a weekly report released by the Brazilian Central Bank. It indicates the expectations of more than 100 institutions of the Brazilian financial market on various indicators of the Brazilian economy, such as GDP, inflation, exchange rate and Selic (basic interest rate).

Insolvency remains high among Brazilian consumers

Two years ago, Brazilian financial institutions were forced by the Central Bank of the country to reduce the time that left consumers rolling the debt on the credit card. This measure aimed to reduce the level of default among Brazilian consumers.

When this measure was announced by the Brazilian Central Bank, credit card interest in Brazil had the highest cost of the world financial system. The average rate has dropped from an unbelievable range of 500% a year to the current 300%, which is still very high.

Entering this type of debt is a clear indication that the Brazilian consumer still faces many difficulties in paying its debts. The level of defaults in the country in 2019 follows around 35%.

To make matters worse, in 2019, defaults by micro and small companies in Brazil reached a record high. The number of defaulters reached 5.3 million in March 2019, according to Serasa Experian.

According to the International Monetary Fund (IMF), the already slow economic recovery in Brazil is at risk

The International Monetary Fund (IMF) has warned this week of the risks posed by domestic and external shocks to the Brazilian economy. According to the IMF, these shocks can hinder the already slow recovery of the Brazilian economy.

According to the IMF, investments in Brazil "remains subdued, retained by idle capacity and persistent uncertainty about the prospects for fiscal and structural reforms. Weak global growth and recession in Argentina are affecting exports. The growth in 2019 is projected between 1% and 1.5%, with significant risks of decline."

For the IMF, the main risk related to the Brazilian economy is associated with the approval of a Pension Reform that generates a "robust" economy to the public coffers in the long term.

Brazilian company Natura buys Avon Products

Natura, the Brazilian cosmetics manufacturer, sent a statement to the market confirming the purchase of US competitor Avon Products. The business had been speculated a few weeks ago by the market. The operation creates, according to the statement of Natura, "the fourth largest exclusive beauty group in the world". An agreement will be made to exchange shares between the two companies: while Natura will control about 76% of the combined group, the rest will be held by Avon shareholders. Taking into account the values of the closing of the shares the day before, the group is valued at US$ 11 billion (about R$ 44.5 billion).

Now along with Avon, Natura must have annual revenues of over US$ 10 billion and more than 40,000 employees worldwide. 

In recent years Natura has adopted an aggressive policy of expansion. In 2013, the Brazilian company bought Australia's Emeis Holdings, a manufacturer of premium beauty products, which operates under the Aesop brand. In June 2017, Natura announced the purchase of 100% of the Body Shop, which belonged to the French L'Oreal, in operation of about 1 billion euros.

The B3, the main indicator of the Bovespa, falls after Brazilian Economy Minister Paulo Guedes threatens to resign

Today, May 24, 2019, the Bovespa Index had its third consecutive day of low. B3's main share index rose more than 1% in the morning, but lost its force in the afternoon and closed 0.30% lower at 93,627.80 points.

This fall occurred after VEJA magazine published an exclusive interview in which the Economy Minister, Paulo Guedes, said he would resign if reform proposal becomes just a "little Pension Reform".

In the week, however, the Brazilian stock market was up 4.04%.

The dollar, on the other hand, closed today at R$ 4.0152, the lowest price in 10 days. The Brazilian Real was the emerging currency that strengthened the most on Friday in relation to the US currency.

One-fifth of Brazilian families use coal to cook food because of pricing policy for household gas of Petrobras

According to a survey published by the IBGE (Pnad Contínua), the impoverishment of the population produced by the prolonged economic crisis combined with rising unemployment and the price of LPG (Liquefied petroleum gas) cylinder led one-fifth of Brazilian families to use firewood or charcoal for cooking. Today, 14 million households prepare food in this way, an increase of 27 percent or three million homes between 2016 and 2018. In the Southeast fo Brazil, growth was 60 percent.

Meanwhile, Petrobras maintains a more expensive price for cooking gas than the one practiced internally since 2018 to recover losses that the company has had in recent years. It is a monopoly that harms the Brazilian people for the benefit of foreign and Brazilian investors.

Unfortunately, this pricing policy of Petrobras is driving the poorest classes in Brazil to return to using firewood to make food. A return to the Middle Ages. It is a country where the "modernity" of the "market prices" practiced by Petrobras forces the use of firewood and coal.

In Brazil, the readjustments in the price of LPG (liquefied petroleum gas) practiced by Petrobras are quarterly and consider international price averages and the exchange rate in previous quarters. It is this policy that led thousands of Brazilians to cook between soot and smoke.

Brazilian consumer confidence index retreats for the 4th consecutive month

Getulio Vargas Foundation (FGV) released today that the Brazilian consumer confidence index declined 2.9 points in May compared to April, from 89.5 to 86.6 points.

This is the lowest level of the index from October 2018, when it stood at 85.4 points. Currently, the consumer confidence index accumulates a loss of 10 points in 4 months.

According to Viviane Seda Bittencourt, "the result of May 2019 shows a significant increase in consumer dissatisfaction with the current situation, especially among families with lower purchasing power. A change in this situation seems to be conditional on the reduction of the high levels of political and economic uncertainty observed in the country today. "

US Dollar continues high in Brazil

The rise in the dollar increases the cost of living in Brazil. Many products sold in Brazil have their prices linked to the US dollar quotation. Drugs and fuel prices are deeply affected by the dollar's price in Brazil.

Foreign capital flows are very important for Brazil. However, the slow pace of Pension Reform in the National Congress drives international investors to become more pessimistic about making new investments in Brazil.

Since May 16, the price of the US dollar in Brazil has exceeded R$ 4.00 and remained above this level. Today, the dollar is up in the Brazilian financial market.

Many analysts are saying that it will only return to a lower level if there is an improvement in the climate abroad, with a possible understanding between China and the United States, or if there is greater confidence in the approval of the Pension Reform in Brazil.