Brazil's jobless rate falls to 4.7 percent in October

RIO DE JANEIRO: Brazil's unemployment rate fell unexpectedly in October despite widening layoffs in manufacturing and construction, in welcome news for President Dilma Rousseff's plan to shore up public finances without painful economic adjustments.

Brazil's non-seasonally adjusted jobless rate fell to 4.7 percent in October from 4.9 percent in September, statistics agency IBGE said on Wednesday. The number was below the median forecast of 4.9 percent in a poll of 28 economists.

It was the lowest unemployment rate for October since the beginning of the current data series in 2002. The unemployment rate has remained near record lows despite weaker job growth mostly because many young adults passed up entering the work force to dedicate more time to training.

Labor Ministry data released earlier this week showed Brazil's economy unexpectedly trimmed 30,283 net payroll jobs in October, the worst reading for the month since the data series began in 1999.

The IBGE unemployment rate covers only Brazil's six major urban areas, whereas the payroll numbers released by the Labor Ministry include smaller cities and farms.

The number of Brazilians with jobs rose 0.8 percent from September and remained unchanged from October last year at 23.3 million. The number of people who failed to find a job was unchanged from September, dropping 10.1 percent from October 2013 to 1.1 million.

Inflation-adjusted wages rose 4.0 percent from October 2013 to an average of 2.122,10 reais ($818) a month. That was 2.3 percent higher than in September.

Economists warn the unemployment rate could rise in coming months as economic growth is set to remain weak at best. Potential budget cuts and tax hikes, which many economists say are necessary to secure Brazil's investment grade, could weigh on employment, in a setback for a country widely praised for its efforts on fighting poverty.

Rousseff is expected to reshuffle her economic team in coming days and could pick a market-friendly candidate for the Finance Ministry. She has cited job growth as one of her top priorities in her second term, along with fiscal responsibility.