In a scenario that few economists would have predicted, Brazil’s labor market ended 2025 close to reaching full employment. Unemployment fell to 5.1% in the rolling quarter through December, the lowest rate on record. For the year as a whole, the unemployment rate averaged 5.6%, down from 6.6% in 2024 and the lowest annual figure under the current methodology — adopted in 2012.
“Crucially, the decline in unemployment was not driven by an increase in underutilization of the labor force or discouragement,” said Adriana Beringuy, coordinator for household surveys at the Brazilian Institute of Geography and Statistics. “The downward trajectory of unemployment in 2025 was sustained by the expansion of employment, mainly in service activities.”
During the Covid pandemic, Brazil’s unemployment came close to 15%, meaning that about 14 million people were left without a job. Today, that contingent has been more than halved, to 6.2 million.
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