Brazil’s August Unemployment Rate Equals Record Low for Month

Brazil’s unemployment rate in August unexpectedly fell, signaling continued recovery in the world’s second-biggest emerging market. Swap rates rose.

The jobless rate dropped to 5.3 percent from 5.6 percent in July, the national statistics agency said in Rio de Janeiro today. That was the lowest since the 4.6 percent recorded in December and equaled the record low for the month. It also was less than forecast by all 32 economists surveyed by Bloomberg, whose median estimate was 5.6 percent.

Unemployment in Latin America’s largest economy has remained near historic lows even as the economy slowed during the first two years of President Dilma Rousseff’s administration. The labor market has put pressure on inflation that in April prompted the monetary authority to start raising borrowing costs.

Swap rates on the contract maturing in January 2014, the most traded in Sao Paulo today, rose seven basis points, or 0.07 percentage point, to 9.31 percent at 9:17 a.m. local time. The real strengthened 0.3 percent to 2.2253 per U.S. dollar.

Brazil’s inflation rate in the month through mid-September slowed to 5.93 percent, falling below 6 percent for the first time this year while remaining above the 4.5 percent midpoint of the central bank’s target range. To tame inflation, the central bank increased the benchmark Selic (BZSTSETA) rate by 175 basis points since April in four monetary policy meetings.

The economy expanded 1.5 percent in the second quarter from the prior period, marking the first time growth exceeded 1 percent since the end of 2010.

The labor force remained stable at 24.5 million people in August as the number of unemployed fell to 1.3 million from 1.38 million, the statistics agency said.

Brazil’s economy created 127,648 government-registered jobs in August, the most since April and beating all but one estimate of analysts surveyed by Bloomberg.

To contact the reporters on this story: David Biller in Rio de Janeiro at dbiller1@bloomberg.net; Peter Millard in Rio de Janeiro at pmillard1@bloomberg.net

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

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