February 27, 2015 / 2:45 PM / 5 years ago

UPDATE 1-Mounting job losses surpass expectations in Brazil

(Adds details, background on unemployment rate)

SAO PAULO, Feb 27 (Reuters) - Brazilian companies shed jobs in January at the fastest pace for the month in six years, the latest evidence that the nation’s once-booming employment market is rapidly losing steam.

Factories, farms and service companies in Brazil cut a net 81,774 jobs in January, the Labor Ministry said on Friday, more than four times the median market forecast in a Reuters poll.

The number of jobs has decreased in three of the past four months. In December, usually a month of losses as companies lay off temporary workers, payrolls fell by 555,508.

Shrinking employment could increase pressure on President Dilma Rousseff, whose popularity has dropped sharply since her re-election last year.

The weak labor market also highlights the effects of government spending cuts and higher taxes on Brazil’s economy, which is already on the brink of recession.

Retailers laid off nearly 100,000 workers in January after a disappointing Christmas season. Manufacturers, mired in a three-year downturn, added jobs for the first time in nine months but at a slower pace than necessary to offset the broader economic malaise, according to Labor Ministry data.

A separate government report earlier in the week showed the unemployment rate jumped in January to 5.3 percent, its highest in more than one year.

“Weak economic activity will likely continue to drive up the unemployment rate in coming months,” Itau Unibanco economist Rodrigo Miyamoto said in a research note.

Market forecasts compiled by the central bank show Brazil’s economy shrinking 0.5 percent this year, its steepest drop since 1992. (Reporting by Guillermo Parra-Bernal and Silvio Cascione; Editing by Chizu Nomiyama)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below