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Brazilian Job Market Surprises: Unemployment Falls to 5.6%, Hits Record Low for May, Brazilian Incomes Rise, and Underemployment Reaches Lowest Level Ever Recorded by IBGE

Author profile image Viviane Alves
Written by Viviane Alves Published on 27/06/2026 at 01:23
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Research reveals progress in the Brazilian labor market, annual income increase, and reduction in the number of people who stopped looking for jobs.

The unemployment rate in Brazil was 5.6% in the quarter ending in May 2026, according to data released by IBGE.

The result represents the lowest rate recorded for a quarter ending in May since the beginning of the historical series in 2012.

The numbers were presented on June 26, 2026, through the Continuous National Household Sample Survey, the Continuous PNAD.

The rate remained statistically stable compared to the 5.8% observed in the quarter ending in February 2026.

In the annual comparison, however, there was a reduction of 0.6 percentage points. Between March and May 2025, unemployment was at 6.2%.

Brazil has 6.1 million unemployed people

The quarter ending in May accounted for 6.1 million unemployed people in the country.

The number remained stable compared to the 6.2 million observed in the previous quarter.

The comparison with the same period in 2025, on the other hand, revealed a drop of 9.3%.

This reduction represents 624 thousand fewer people looking for a job opportunity in just one year.

According to IBGE analyst William Kratochwill, the quarterly stability has a seasonal component.

The historical low, however, demonstrates that the market maintains its structural capacity to absorb new workers.

Employed population reaches 102.7 million

The employed population reached 102.7 million people in the quarter ending in May.

The market incorporated 558 thousand workers compared to the previous quarter. In the annual comparison, the growth reached 840 thousand people.

The employment level, thus, stood at 58.6%.

This indicator represents the proportion of employed people among those who are of working age.

The Brazilian workforce reached 108.8 million people.

This group includes employed workers and Brazilians who are still looking for jobs.

Underutilization reaches lowest level in history

The underutilization rate fell to 13.3%, reaching the lowest level ever recorded by IBGE.

The indicator was at 14.1% in the previous quarter. In the same period of 2025, the index had reached 14.9%.

The underutilized population, consequently, fell to 15.1 million people.

The group includes unemployed individuals, workers with few available hours, and people who could work but were not looking for a job.

The number of Brazilians working fewer hours than they desired reached 4.1 million, with a quarterly reduction of 5.7%.

William Kratochwill assesses that the contingent available to be absorbed by the market is decreasing.

The lower supply of workers may increase pressure for better salaries and professional conditions.

Number of discouraged individuals also decreases

The discouraged population totaled 2.4 million people in the quarter ending in May.

This group includes Brazilians who gave up looking for a job because they believed they would not find an opportunity.

The contingent fell 10.2% in the quarter and 14.6% in the annual comparison.

The discouragement rate, in this scenario, fell to 2.2%. In the same period of 2025, the indicator was at 2.6%.

The population out of the workforce reached 66.5 million people.

This group remained stable in the quarter but grew 1.7% in a year, with an additional 1.1 million people.

Informality still reaches 38.3 million

Informality remained high, despite the improvement observed in the main market indicators.

The country recorded 38.3 million informal workers. The informality rate was 37.3% of the employed population.

Employees with a formal contract totaled 39.3 million.

Workers without a formal contract reached 13.4 million, while self-employed professionals totaled 26 million.

Domestic work gathered 5.4 million people. However, this group lost 328 thousand workers in a year.

Average worker income reaches R$ 3,726

The real average habitual income reached R$ 3,726 in the quarter ending in May.

The value remained stable compared to the previous quarter, but showed an approximate growth of 4% in the annual comparison.

The total income mass reached R$ 377.7 billion.

The transportation, storage, and postal sector increased employment by 3%, incorporating 177 thousand workers.

Public administration, defense, education, health, and social services grew by 3.1%, with 591 thousand additional employed.

The IBGE data, therefore, reveal historically low unemployment, lower underutilization, and annual growth in the income of Brazilian workers.

Can the improvement in the job market already be perceived in the opportunities and salaries offered in your region? Share your opinion!

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Viviane Alves

Writer specializing in the production of strategic content covering macro and microeconomics, geopolitics, the energy market, the automotive sector, and global trade.

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