(Adds comments from labor minister, economist)
By Silvio Cascione
BRASILIA Nov 14 Brazilian companies shed jobs
in October for the first time in at least 15 years, revealing
the delicate state of the economy ahead of potential tax hikes
and government austerity.
Latin America's largest economy unexpectedly trimmed 30,283
net payroll jobs in October, Labor Ministry data
showed on Friday, the worst reading for the month since the data
series began in 1999.
The numbers point to a likely increase in the jobless rate,
a potential blow to newly re-elected President Dilma Rousseff,
who has pledged to shore up government finances and stem
inflation without increasing unemployment.
The October job losses were widespread, but more common
among builders and manufacturers. Retailers did not pick up the
slack despite preparations for the holiday shopping season,
hiring about half as many people as in the same month a year
Labor Minister Manoel Dias blamed the October election for
the surprisingly weak numbers, suggesting companies might have
put off hiring plans as they waited to see who would win the
country's tighest presidential race in decades.
"We expect better results in November as we have news of
many new building contracts and extensive hiring in
construction," the minister said in an emailed statement.
But economists say Brazil is facing years of weak growth and
have called for steep budget cuts, along with hikes in taxes and
interest rates in order to prevent the government's debt load
from rising further. Credit ratings agencies have warned of a
potential downgrade next year, which could reduce capital
"With these (jobs) numbers, we feel forced to cut our
economic growth forecast for 2014, from 0.3 percent to zero,"
said André Perfeito, chief economist at Gradual Investimentos in
Many of Brazil's homebuilders, carmakers and retailers, such
as GPA SA, have already been trimming jobs since
earlier this year to reduce costs and protect profits, but they
have been careful to avoid mass layoffs.
Latin America's largest economy was expected to have added
56,000 payroll jobs in October, according to the median forecast
of five economists. Brazil added 123,785 jobs in September.
Brazil's economy has added 912,287 jobs from January to
October, mostly unskilled, low-paid posts in services companies.
(Reporting by Silvio Cascione; editing by G Crosse)