• Average wages decline and unemployment rate stabilizes.
• Labor markets are expected to support domestic demand in 2012.
The implementation of a laxer monetary policy, the (gradual) decline of inflation, and especially the 14% minimum wage adjustment to be enacted next year should, in our view, prevent labor markets from hard landing. Regarding the increase of the minimum wage, it should drive wage mass up by 3% according to a study released this week by the CB. Labor markets should, therefore, remain strong in 2012, although not as strong as in 2011.