Brazil joblessness steady, wages rise in August

SAO PAULO: Brazil's low joblessness rate held steady in August from July, as wages continued the advance that has pressured inflation and worries policymakers.

Brazil's jobless rate held at 6 percent in August from July, the government's statistics agency IBGE said on Thursday, slightly below the 6.1 percent expected in a Reuters survey of 18 economists.

With employers increasing salaries for sought-after workers, near record-low unemployment rates in Brazil have helped boost inflation to six-year highs.

The benchmark IPCA inflation index sped above a 6.5 percent target ceiling in April and has only picked up its pace since, with the rate at about 7.33 percent in the 12 months through mid-August.

Nevertheless, the central bank cut its benchmark interest rate to 12 percent from 12.50 percent at the end of last month, citing an expected slowdown thanks to a euro zone sovereign debt crisis and worries the US economy -- the world's biggest -- could be faltering.

Analysts said the rate cut was risky, leaving central bank chief Alexandre Tombini little room to maneuver should inflation not brake as expected.

Other central banks in Latin America have yet to follow Brazil's move, pausing a monetary tightening cycle but not yet cutting.

At the Damyller clothing store in Sao Paulo's Vila Olimpia mall, Adilson Daniel knows well how tight the labor market is. Daniel is manager of stores for the Damyller company, but has stepped in to personally oversee the Vila Olimpia store, whose manager left recently.

In the year or so that the Vila Olimpia store has been open, he said, "three managers have left, and we've lost our entire sales team."

Last month, the number of Brazilians with jobs in the six major metropolitan areas surveyed edged up 0.65 percent to 22.623 million people and rose 2.2 percent from the year-ago period, the IBGE said.

The tally of people who unsuccessfully looked for work dipped 0.28 percent in August from July to 1.44 million. The figure dropped 10 percent from a year earlier.

Real wages, or salaries discounted for inflation, rose 0.5 percent month-on-month to 1629.40 reais ($851.52) and 3.2 percent from the year-earlier month.

Copyright Reuters, 2011