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UPDATE 1-Brazil records lowest jobless rate for month of January
February 26, 2013 / 12:50 PM / 5 years ago

UPDATE 1-Brazil records lowest jobless rate for month of January

* Unemployment rises to 5.4 pct from 4.6 pct in December

* Real wages dropped 0.1 pct from December

SAO PAULO, Feb 26 (Reuters) - Brazil’s unemployment rate rose slightly more than expected in January but remained near a record low, the latest sign of a tight job market that is stoking inflation as the government struggles to rein in consumer prices.

Government data released on Tuesday showed Brazil’s jobless rate rose to 5.4 percent from 4.6 percent in December. The rate was the lowest for the month of January, despite the increase, since the data series began in March 2002, according to statistics agency IBGE.

The number was slightly above the median forecast of 5.3 percent in a Reuters survey of 27 economists. In January 2012, Brazil’s jobless rate was 5.5 percent.

Brazil’s jobless rate is not seasonally adjusted and usually rises in January as businesses lay off temporary workers following the holiday season.

A separate report by the labor ministry had showed an unusually sharp drop in payroll job creation in January, though. Brazil’s economy added a net 28,900 payroll jobs last month, the worst January since 2009 and 76 percent down from the same month last year.

A strong labor market is crucial for Brazil’s ambitions to at least triple its growth rate from a mediocre 1.0 percent estimated for last year. But the tight supply of workers in some areas has also fueled inflation, creating a dilemma for the central bank as it tries to keep interest rates at record lows.

The IBGE report showed that the number of Brazilians with jobs in the six major metropolitan areas fell 1.2 percent from December to 23.1 million people. The number rose 2.8 percent from the same month a year earlier.

The number of people who unsuccessfully looked for work rose 17.2 percent from December and remained unchanged from a year earlier at 1.3 million.

Real wages, or salaries discounted for inflation, dropped 0.1 percent from December to an average of 1,820.00 reais ($919) a month. They rose 2.4 percent from the year-earlier period.

The unemployment rate, as calculated by the IBGE, tallies jobs in the formal sector, where employers are legally registered, and off-the books jobs in the so-called informal sector. On the other hand, the labor ministry’s nationwide payroll collection is based on a survey of only legally registered, or “formal sector,” employers.

Estimates for the rate ranged from 4.9 percent to 5.5 percent, according to the Reuters poll.

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