UPDATE 2-Brazil jobless rate dips, labor market still tight

Thu May 26, 2011 12:14pm EDT

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 * Brazil's jobless rate edges down to 6.4 pct in April
 * Real wages edge lower from March
 (Adds analysts' comments)
 RIO DE JANEIRO, May 26 (Reuters) - Brazil's unemployment
rate edged down to 6.4 percent in April from 6.5 percent in
March, the latest sign of a tight labor market that is
pressuring inflation in Latin America's largest economy.
 The jobless rate was the lowest on record for the month of
April since the current methodology was adopted in 2002, the
government's statistics agency IBGE said on Thursday.
 The unemployment rate had been expected to slip to 6.4
percent, according to the median forecast of 16 economists
surveyed by Reuters. The estimates ranged from 6.3 percent to
6.7 percent.
 Economists said that, after seasonal adjustments, the rate
was in fact at an historic low.
 "This is going to keep complicating the central bank's
efforts to cool the economy," said Thais Marzola Zara, chief
economist with Rosenberg e Associados consultancy in Sao
Paulo.
 She estimated the seasonally adjusted rate at 5.9 percent,
below a more natural rate of unemployment for the country and
likely to stay that way for the rest of the year.
 "We would need to slow the economy considerably" to rise to
a natural rate of unemployment, she said, adding that it was
difficult to peg what that number could be.
 Last year, Brazil's unemployment rate notched a series of
record lows. The tight market helped boost salaries, as
employers especially sought workers with higher levels of
education and technical skills.
 Last month, the number of Brazilians with jobs in the six
major metropolitan areas surveyed was unchanged from March at
22.3 million people, the IBGE said.
 The tally of people who unsuccessfully looked for work also
held steady from the previous month, at 1.5 million people.
 Real wages, or salaries discounted for inflation, slipped
1.8 percent month-on-month to 1.540 reais ($944.80).
 The government has used a series of measures to try to
brake inflation and bring the country to sustainable growth.
President Dilma Rousseff has promised to cut 50 billion reais
from the budget in an attempt to cool the economy.
 The central bank has also raised interest rates three times
so far this year to 12 percent from 10.75 percent at the close
of last year, and has noted the potential for a "prolonged"
tightening cycle.
 Many economists say those measures are still taking
effect.
 "(T)he Brazilian labor market remains robust and has not
yet been impacted by restrictive fiscal, monetary and credit
policies," wrote Luciano Rostagno, chief strategist of CM
Capital Markets. As those measures gain traction, he wrote, "we
continue projecting a gradual slowdown of the labor market
along the year."
 For the IBGE's jobless report, see:
here
 ($1=1.63 reais)
 (Reporting by Rodrigo Viga Gaier; Writing by Todd Benson and
Luciana Lopez, Editing by Kenneth Barry)



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