Brazil January Job Losses Larger Than Forecast as Economy Slows

Brazil lost more jobs than forecast in January as policy makers in Latin America’s largest economy boost interest rates and reduce spending.

The economy lost 81,774 jobs in January, more than forecast by all of the 21 analysts surveyed by Bloomberg and the worst for the month since 2009, according to an e-mail sent by the Labor Ministry. The median estimate in the survey was for a loss of 23,511 jobs.

A strong labor market had been one of the strong points of President Dilma Rousseff’s first term ending Dec. 31, as unemployment remained near record lows. That changed in January when the jobless rate, including the informal sector, rose to the highest level since September 2013. Unemployment jumped to 5.3 percent from 4.3 percent a month earlier.

Swap rates on the contract due in January 2017 fell nine basis points, or 0.09 percentage point, to 12.85 percent at 10:28 a.m. local time. The real strengthened by 0.9 percent to 2.8793 per U.S. dollar.

Latin America’s largest economy grew 0.1 percent in the third quarter of 2014 over the three previous months, after contracting 0.6 percent in the second quarter. The result pulled Brazil from the recession it entered in the first half of the year.

Economists in the central bank’s latest weekly survey forecast gross domestic product will contract 0.5 percent this year. Rousseff has vowed to carry out a fiscal adjustment without jeopardizing jobs and social gains.

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