Contradictory signals

BRAZIL ECONOMICS - Report 10 Aug 2026 by Alexandre Schwartsman, Cristina Pinotti and Diego Brandao

Real wage decline in the second quarter comes in the context of an unemployment rate still near historical lows. This behavior of real income was not driven solely by inflation, which did in fact accelerate in the second quarter, but rather by a sharp slowdown in nominal wages. However, with a tight labor market, this dynamic may prove temporary, as suggested by our estimates of the Phillips curve for wages. We have not identified an increase in economic slack that would lead to a more lasting slowdown in income. In this sense, a possible continuation of Selic rate cuts by the Central Bank supports our assessment of an increasingly distant convergence horizon.

Now read on...

Register to sample a report

Register
Must have at least 8 characters
Sign-in
Forgot your password?
Copyright 2026 GlobalSource Partners. All rights reserved. This report is prepared for GlobalSource Partners’ clients and may not be redistributed, reproduced, stored in a retrieval system, retransmitted or disclosed, in whole or in part, or in any form or manner, without the express written consent of GlobalSource Partners. This report is distributed simultaneously to our website and other portals used by GlobalSource Partners. The information herein was obtained from various sources and is believed to be reliable but GlobalSource Partners does not warrant its completeness or accuracy. Neither GlobalSource Partners nor any Country Analyst, officer or employee accepts any liability whatsoever for any direct, indirect or consequential damages or losses rising from any use of this report or its contents.