February 22, 2013 / 6:06 PM / 5 years ago

UPDATE 2-Brazil's job creation slows sharply as economy struggles

* Economy adds 28,900 jobs in Jan, below expectations

* Worst result for January since 2009 crisis

* Labor ministry sees 2 mln new jobs in 2013

BRASILIA, Feb 22 (Reuters) - Job creation in Brazil posted its worst January result since the global financial crisis in 2009, suggesting lackluster economic growth has weighed on the country’s robust labor market.

Brazil’s economy added a net 28,900 payroll jobs in January, a 76 percent drop from the same month last year, the labor ministry said on Friday. The median of analysts’ forecasts called for a gain of 46,000 jobs.

The result was the worst since January 2009 when the economy shed 101,748 jobs, according to the ministry data.

Latin America’s largest economy had lost 497,000 payroll jobs in December, though much of that decline was due to seasonal factors. Local businesses and industries tend to fire temporary workers after bolstering output ahead of the Christmas holidays.

Effects of that trend carried over into January, the labor ministry said, particularly within the retail sector, which lost a net 67,458 jobs.

Services added a net 14,746 jobs in January compared with 61,463 jobs created the same month last year, while agriculture lost 622 positions.

The pace of job creation has slowed in Brazil after two years of meager economic growth. However, unemployment has remained at all-time lows as businesses hold on to workers in expectation of an economic recovery. Brazilian labor laws also make firing workers difficult and expensive.

Brazil’s unemployment rate dropped to a record low in December, falling to a non-seasonally-adjusted 4.6 percent, from 4.9 percent in November.

The labor ministry predicts that Brazil will create more than 2 million new jobs in 2013 as the economy picks up steam.

One bright spot in January’s jobs report was manufacturing, which added a net 43,370 jobs, compared with 37,462 jobs in the previous year.

Brazil’s manufacturing sector has been undergoing a mild, uneven recovery in recent months following several stimulus measures by the government such as tax breaks and trade barriers.

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