Stronger-than-expected hiring bolstered expectations for a more hawkish BCB, while investors also weighed the Fed's hold, fiscal concerns and pressure on revenues from new US tariffs.
Brazil added 145,161 formal jobs in June 2026, beating market expectations of 115,000 and accelerating from 72,960 in May, reinforcing signs of labor-market resilience. The net gain came as 2.22 million workers were hired and 2.07 million were laid off during the month. Job growth was broad-based, with all five major sectors recording net additions, led by services with 74,514, followed by agriculture with 22,898, commerce with 19,177, industry with 14,438 and construction with 14,136. The gains were also geographically widespread: 25 of Brazil's 27 states registered positive job creation, led by São Paulo, Minas Gerais and Rio de Janeiro, while Espírito Santo and Tocantins were the only states to post losses. In the first half of 2026, the country created 921,645 formal jobs, taking the total stock of formal employment to 48.03 million. Investors took the data as support for a more hawkish BCB after the central bank lowered the Selic rate to 14.25% in June from 14.50% while warning that a resilient labor market continues to feed services inflation. Brazil's 10-year government bond yield rose to 14.81% after touching 14.79% on July 29 as markets also digested the Federal Reserve's decision to keep rates unchanged, with three FOMC members favoring a rate hike, alongside concerns over higher deficit spending and pressure on government revenues from new US tariffs. Copom is due to meet on August 4-5 to decide the next Selic rate level.