Brazil’s unemployment rate in October fell to a record low for the month, as the labor market remains strong in the face of lackluster growth. Swap rates rose.
The jobless rate fell to 5.2 percent from 5.4 percent in September, the national statistics agency said in Rio de Janeiro today. That was less than forecast by 32 economists surveyed by Bloomberg, whose median estimate was 5.3 percent.
President Dilma Rousseff, who faces an election next year, has highlighted low unemployment as an achievement of her administration. While job creation slowed this year, joblessness in the world’s second-largest emerging market remained at near-record lows, stoking inflation that pressured the central bank this year to undertake the largest rate-increase cycle in the world.
“The labor market should be falling in line with economic performance, but at this point we’re not seeing it,” Roberto Padovani, chief economist at Banco Votorantim Ctvm Ltda, said by phone from Sao Paulo. “In terms of real income and political popularity, that’s a nice result. It’s not a nice result thinking about inflation.”
Swap rates on the contract maturing in January 2015, the most traded in Sao Paulo today, rose 10 basis points, or 0.10 percentage point, to 10.87 percent at 9:43 a.m. local time. The real weakened 1.2 percent to 2.2990 per U.S. dollar.
“We constructed our stability -- controlled inflation, a fiscal surplus and high reserves -- while increasing income and employment,” Rousseff said on Twitter on Nov. 18.
Brazil created 1 million government-registered jobs in the first nine months of 2013. That’s down from 1.3 million and 1.8 million in the same period of 2012 and 2011, respectively. Average real income in the first nine months of 2013 was 1,880 reais ($817) per month, up from 1,851 reais and 1,780 reais in 2012 and 2011.
Brazil’s inflation rate in the month through mid-November accelerated to 5.78 percent from 5.75 percent in the previous period, above the 4.5 percent midpoint of the central bank’s target range. To tame inflation, the central bank has increased the benchmark Selic rate by 225 basis points since April to 9.5 percent.
Economists in the latest weekly central bank survey forecast gross domestic product growth of 2.5 percent this year and 2.1 percent next, after expansion of 0.9 percent in 2012.
The labor force was unchanged in October from the month before at 24.5 million. The number of unemployed fell 4.4 percent to 1.27 million, the statistics agency said. The agency surveys the job market in six of Brazil’s metropolitan areas.