The unemployment rate in Brazil fell sharply to 5.8% in second quarter of 2025 from 7% in the previous quarter, the lowest on record, and below market expectations of a 6% unemployment rate. The figure consolidated the view of a tight labor market amid as increased government spending stimulates the economy, strengthening the central bank's argument that interest rates should remain restrictive for a prolonged period. The unemployed population sank by 17.4% on the quarter to 6.3 million people, while net employment rose by 1.8% to 102.3 million, a record high. This is despite the record high level of labor force participation, at a rate of 58.8%. In turn, real wages inched higher by R$37 to R$3,447 monthly.