• Country's two-year downturn is the worst in over a century
  • Labor market hasn't reached bottom yet: Banco Mizuho analyst

Brazil shed more than 100,000 formal jobs in March as a second year of recession pummels a labor market that’s not expected to improve in 2016 regardless of how President Dilma Rousseff’s impeachment process plays out.

The March result of 118,776 jobs lost marked the 12th straight month of employment decline, the longest run of negative prints since the government began tracking formal job creation in 2003. Since Rousseff began her second term in 2014, almost 2 million formal jobs have been cut. Over the same period, the national unemployment rate has risen to 10.2 percent from 6.5 percent.

Brazil is heading for the worst recession in over a century, as economists see gross domestic product falling 3.8 percent in 2016 following a similar contraction in 2015. Even as Brazil’s stocks and currency have rallied on hopes of a more market-friendly administration by Vice President Michel Temer, the real economy remains in bad shape and has a slower reaction time, said Banco Mizuho do Brasil SA’s chief strategist Luciano Rostagno.

“We still haven’t reached rock bottom yet in the labor market, the trend is for unemployment to increase further,” said Rostagno. “The only possible short term improvement with Temer in office would be labor market worsening in a slower pace”.

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