Brazil hit with double whammy of bad economic news

Brazil was hit with a one-two punch of bad news on Friday, as the jobless rate rose once again to a new high, while economic activity continued its downward spiral as the country struggles to exit its worst recession on record.

The unemployment rate climbed to 13.2% – with 13.5mn workers looking for jobs – in the three months through February, according to data from statistics bureau IBGE. Meawnhile, the central bank released its GDP proxy, or IBC-Br, showing a 0.26% contraction in January compared to the previous month.

The jobless rate is the highest in the data series started in 2012 by IBGE, and up from 12.6% in the three months through January. It was in line with expectations of analysts surveyed by Broadcast Projections.

Itaú Unibanco's chief economist, Mario Mesquita, noted during a recent presentation that unemployment is always the last indicator to see an improvement at the end of a recession. Brazil's largest bank expects 2017 to end with a 13.2% unemployment rate, which should improve to 12.9% next year.

Brazil's recession deepened in 2016, when the economy contracted 3.6%. The central bank's latest weekly forecast survey estimates 0.47% GDP expansion this year and growth of 2.50% in 2018.