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By Jamie McGeever
BRASILIA, June 30 (Reuters) - Brazil’s unemployment rate rose to a two-year high of 12.9%, official figures showed on Tuesday, as the coronavirus-fueled shock to the economy inflicted increasing damage on the labor market.
That was slightly lower than the 13.0% economists had expected, but underlying details showed conditions are deteriorating more rapidly and severely than the headline rate would indicate.
It would have been a lot higher had a record number of people left the workforce. For the first time since the data series began in 2012, less than half the people of working age were in work, statistics agency IBGE said.
“The unemployment rate ... is expected to (rise) visibly more in coming months. The unemployment rate would have spiked significantly more were it not for the large decline in labor force participation,” said Alberto Ramos, head of Latin American research at Goldman Sachs.
The underemployment rate, number of people out of work and number of discouraged workers all rose to the highest on record, IBGE said.
The headline 12.9% unemployment rate in Latin America’s largest economy in the three months to May was the highest since the three months to April 2018.
Tuesday’s figures showed that 85.9 million people were in work, down almost 7.8 million, or 8.3%, from the same period last year, both record declines.
That pushed the labor force participation rate down to 49.5%, with a record 75 million people now out of the workforce. That marks an increase of more than 9 million people, or 13.7%, from the same period last year, IBGE said.
“Less than half of the working age population is in work. This had never happened before,” said IBGE research analyst Adriana Beringuy.
The number of Brazilians officially out of work stands at 12.7 million, and the number of underemployed rose by 3.6 million, or 13.4%, to a record 30.4 million, IBGE said. The underemployment rate jumped to 27.5%, also a record. (Reporting by Jamie McGeever; Editing by Bernadette Baum and Jonathan Oatis)