UPDATE 1-Brazil's unemployment rate rises to 12.7%, reflects weak labor market

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BRASILIA, April 30 (Reuters) - Brazil’s jobless rate rose to 12.7% in the three months to March from 12.4% in the three months to February, IBGE statistics agency said on Tuesday, with underemployment hitting its highest level since comparable records began in 2012.

The unemployment rate was slightly lower than the 12.8%median forecast in a Reuters poll of economists, but the overall picture painted by the figures was of an economy struggling to generate any significant growth momentum.

It was the third month in a row where the unemployment rate has risen, and marked a quarterly rise in the jobless rate of 1.1 percentage points from October-December last year, the figures showed.

The number of unemployed people in Brazil rose to 13.4 million in the first quarter, an increase of 1.2 million, or more than 10%, from the fourth quarter of last year, IBGE said.

Perhaps more significantly, the levels of underemployment and workers leaving the workforce all together rose sharply in the three months to March, suggesting the labor market’s underlying conditions were deteriorating.

The rate of underemployment rose to 25% from 23.8% in the preceding three months, the highest since the series began in 2012, IBGE said. The percentage of people who had taken themselves out of the workforce rose to 4.8% from 4.2% percent, also a series high.

The high degree of slack in the labor market helped ensure there was no wage growth, with average real monthly earnings remaining steady at 2,291 reais ($583), the IBGE figures showed.

Tuesday’s figures were the latest in a series of disappointing reports on Brazil’s labor market. Earlier this month, data showed the economy shed a net 43,196 formal jobs in March, far worse than the net addition of 79,000 jobs economists had expected.

$1 = 3.93 reais Reporting by Jamie McGeever; Editing by Bernadette Baum