Brazil’s unemployment rate rose in June to the highest since April 2012, signaling a weakening labor market after five quarters of below-forecast economic growth in Latin America’s biggest economy.
The jobless rate jumped to 6 percent last month from 5.8 percent in May, according to a report today on the National Statistics agency’s website. That was higher than expected by all but 1 of 27 economists surveyed by Bloomberg, whose median forecast was for a 5.8 percent rate. The rate also rose from 5.9 percent the year before, the first rise in June since 2009.
Near-record low unemployment in the world’s second-largest emerging market had helped sustain consumer demand while stoking inflation through higher labor costs. Now, falling purchasing power is forcing some people who had left the labor market to return, said Jose Goncalves, chief economist at Banco Fator SA.
“It clearly reflects a softening labor market,” Goncalves said by telephone from Sao Paulo. “The most likely reason is that those people who left the labor market when salaries were rising are now coming back.”
Average annual real wage growth slowed to 0.8 percent in June from 1.4 percent in April, Alberto Ramos, chief Latin America economist at Goldman Sachs, said in an e-mailed research note today.
Swap rates due in January 2015, the most traded in Sao Paulo today, rose three basis points, or 0.03 percentage point, to 9.31 percent at 11:53 a.m. local time. The real weakened 1 percent against the dollar to 2.2366.
Brazil’s formal job creation in the first half of 2013 was the weakest for the period in four years, the Labor Ministry reported yesterday.
Quicker inflation, increased family indebtedness and a drop in consumer and business sentiment have contributed to below-forecast economic growth for the past five quarters. Analysts in the latest central bank survey cut their 2013 GDP growth forecast for the 10th straight week, to 2.28 percent, and predicted 2.6 percent expansion in 2014.
Brazil’s economy slowed to 0.9 percent growth last year from 2.7 percent in 2011, as manufacturers lost ground to foreign competitors.
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