January 21, 2014 / 7:47 PM / 4 years ago

UPDATE 1-In 2013, Brazil added fewest net payroll jobs in a decade

By Luciana Otoni

BRASILIA, Jan 21 (Reuters) - Brazil’s economy added the fewest net payroll jobs in a decade last year, a sign that three consecutive years of weak economic growth had weighed down profit margins and hiring at shops and services firms, government data showed on Tuesday.

Excluding seasonal adjustments, farms, industrial factories and retail firms created a net 730,687 payroll jobs in 2013, the smallest number since 2003, the labor ministry said. Taking into account the impact of seasonal adjustments, the economy created a net 1.17 million jobs - also the worst in a decade.

Speaking at a news conference in Brasilia, Labor Minister Manoel Dias forecast a recovery in seasonally adjusted net job creation to between 1.4 million and 1.5 million payroll positions this year.

Part of the recovery in job creation, Dias noted, will stem from a surge in investment projects that were announced last year but whose construction will begin in 2014.

The pace of job creation in Latin America’s largest economy has lost momentum since 2011, when President Dilma Rousseff took office on a platform of slashing borrowing costs and doubling economic expansion rates. With inflation stubbornly high and consumer confidence waning, economists have been cutting their forecasts for economic growth in 2014 over the past few months to around 2 percent.

Despite the slowdown in job creation, Brazil’s unemployment rate remains around record lows as more Brazilians leave the labor force temporarily to dedicate time to education and training.

In December, the economy shed a net 449,444 jobs , in line with market expectations, the ministry said.

Economists had expected the economy to lose 456,000 positions last month, according to the median forecast of 10 respondents surveyed. Brazilian companies usually hire temporary workers for the holiday shopping season, laying them off before the end of the year.

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