Brazil’s 10-year government bond yield fell to around 14.13% in late September following the release of August labor-market data. The country generated 165,827 formal jobs, well above the forecast of 95,700 and up from 58,568 in July, marking the strongest result since March. The unemployment rate stood at 5.3% in the rolling quarter ended in August, unchanged from the previous quarter and in line with expectations.
Despite the solid headline payroll figures, the underlying trend is more moderate on a seasonally adjusted basis, and job creation remains weaker than in 2024 and early 2025. Overall, the data point to a gradual cooling of the labor market and support expectations that GDP will be roughly flat in the third quarter of 2026, without signs of a sharp deterioration. Accordingly, the release did not alter market expectations for continued easing of the Selic rate.
The decline in yields also coincided with fresh polling that reinforced the outlook for a tightly contested presidential race just days before the first-round vote.