Campos Neto warns against full employment: “worrying”

I wrote in Economy he 1/5/2024 09:07 AM

Central Bank President Roberto Campos Neto is a neoliberal. Like the neoliberal, he fears economic growth and money in the hands of workers.

This Tuesday (30) he gave an interview to his fellow neoliberal William Wack on CNN. A journalist who was fired from Globo for racist rhetoric has questioned the economist's view of full employment.

The topic was put on the agenda because, on the same day, the IBGE published unemployment levels for March, which were the best since 2014, with a high level of formalization.

Since January 2023, Lula's government has created 2.2 million jobs and should reach full employment (between 6% and 3% of unemployment) in its first term.

Campos paid tribute to Neto…but it did not last long.

“British Columbia would love to have a full employment system, when everyone looking for work can find it, which is our current situation, which has improved a lot and was a big surprise,” he said.

Then, under pressure from WAC to talk about the impact of this situation on inflation, Neto revealed his true opinion.

“The anxiety comes when companies are unable to hire, and you have to start raising wages. If you raise wages for the same level of output, that means you start an inflationary process. So the anxiety comes from there,” he said.

“There is this concern, because there is uncertainty about how the limited workforce will impact the services part. (This indicator of inflationary pressure) has shown up in double or triple digit inflation, but it has become a little better recently,” the economist added.

Job growth could serve as an argument for BC to keep interest rates high at the next Monetary Policy Committee (Copom) meeting, thus halting the 2024 GDP increase.

Bolsonari's term ends on January 31 of this year.