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Despite sluggish economy, Brazil unemployment at record low 2.6% in November

Friday, December 20th 2013 - 06:17 UTC
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Average monthly salary stands at the equivalent of 845 US dollars Average monthly salary stands at the equivalent of 845 US dollars

Unemployment in Brazil's six-largest cities was 4.6% in November compared with 5.2% in October, the Brazilian Institute of Geography and Statistics, or IBGE, said on Thursday. That was the lowest monthly reading since December 2012, when unemployment was also at 4.6%.

 The unemployment rate in November 2012 was 4.9%. November's unemployment rate was less than the 4.9% median estimate of economists polled by the local Estado news agency.

Brazil which is Latin America's largest economy, however, continues to struggle with sluggish growth that is affecting hiring, economists said. That could be an ominous sign for President Dilma Rousseff, who is widely expected to run for a second term in next year's presidential elections. Rising unemployment would add another topic to the list of talking points opposition candidates are expected to use on the campaign trail, joining Brazil's weak growth and high inflation under Ms. Rousseff's watch.

Brazil's economy contracted 0.5% in the third quarter, and is expected to end 2013 with a meager expansion of 2.3%, according to the Brazilian Central Bank's latest market survey released Monday. Inflation is expected to end the year at 5.7%, above the government's 4.5% target.

The unemployment rate, however, will likely continue to fall through the end of 2013 because of demographic and seasonal factors rather than creation of new jobs, economists at Banco Santander said in a report published before the figure was released. Lackluster job creation “reflects weak economic activity and low level of business confidence,” Santander said.

Despite the gloomy growth outlook, Brazil's historically low unemployment rate has complicated the government's fight against inflation by pushing salaries higher. Companies have to pay more to hire and retain workers, passing along salary increases to consumers in the form of higher prices for everything from haircuts to car repairs.

Wages continued to grow in November, rising 2% from October to 1,965.20 Brazilian Reais (843.47 dollars), the IBGE said. Monthly salaries were also 3.0% higher when compared with November 2012.

The IBGE measures unemployment in six of Brazil's largest metropolitan areas, including Sao Paulo, Rio de Janeiro, Salvador, Belo Horizonte, Recife and Porto Alegre.

Categories: Economy, Brazil.

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  • macsilvinho

    The corrupt Venezuela-style government of Brazil has an incredible immagination inventing good news among a sea of bad ones! No growth, rampant criminality, a World Cup that God knows what will be like, corruption like never seen in this country and Dilma will be automatically reelected... (laugh)

    Dec 20th, 2013 - 11:20 am 0
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