Brazil’s unemployment rate just hit a five-year high

Dissatisfaction is in the air.
Dissatisfaction is in the air.
Image: Reuters/Ueslei Marcelino
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Brazil’s unemployment rate hit 7.5% in July, the highest it’s been since May 2010.

Protesters packed streets across the country this week to denounce Prime Minister Dilma Rousseff’s administration. Their main concerns are alleged corruption, but the stagnant economy certainly is sharing center stage.

Brazil hasn’t officially begun its recession, but all the signs are there, from anemic consumer spending to its struggling currency, the real.

Just last week, credit-rating agency Moody’s downgraded the country’s bonds to a single notch above junk status, citing those economic strains:

Growth has been even weaker than Moody’s expected a year ago, and will remain so, in the agency’s view. Fiscal and monetary policy tightening, along with weak consumption and investment spending, will negatively impact economic growth in 2015-16, with the expectation of a recession in 2015, a stagnant economy next year, and a gradual post-2016 recovery with GDP growth reporting annual rates of about 2% in 2017-18.