Brazil’s Unemployment Rate Dropped to a Record in December

Brazil’s unemployment rated dropped to the lowest on record last month as companies expect economic growth to rebound after slowing for two consecutive years.

Unemployment fell to 4.6 percent from 4.9 percent in November, the national statistics agency said in Rio de Janeiro today. Economists had forecast unemployment would fall to 4.4 percent, according to a survey by Bloomberg of 29 analysts.

The jobless rate remained at an historic low last year as companies antecipated that record low borrowing costs, government tax breaks and increased public spending would fuel economic growth. Near full employment and rising real wages have pressured inflation, which has remained above the central bank’s 4.5 percent target for 28 months.

Swap rates on the contract maturing in January 2015, the most traded in Sao Paulo today, fell 3 basis points, or 0.03 percentage points, to 7.88 percent at 9:17 a.m. local time. The real rose 0.16 percent to 1.9855 per U.S. dollar.

Economists surveyed by the central bank forecast gross domestic product will expand 3.19 percent this year, up from 0.98 percent in 2012.

To contact the reporter on this story: David Biller in Rio de Janeiro at dbiller1@bloomberg.net

To contact the editor responsible for this story: Andre Soliani at asoliani@bloomberg.net

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