SAO PAULO: Unemployment in Brazil dropped to a record low in December, squeezing an already tight job market that has fueled inflation even as growth slows in Latin America's largest economy.
Brazil's jobless rate fell to 4.7 percent in December from 5.2 percent in November, government statistics agency IBGE said on Thursday, recording the lowest unemployment rate since the series began in 2002.
The unemployment rate had been expected to fall to 4.9 percent, according to the median forecast of 25 economists surveyed by Reuters. The estimates ranged from 4.7 percent to 5.4 percent.
Brazil's red-hot job market has pushed up wages as companies compete for qualified workers.
"Employees are leaving, looking for more money, and it's hard to compete because the market is offering it," said Walter Fernandes Cabral, a restaurant manager in S?o Paulo, Brazil's business capital. "It's getting worse every day."
With wages climbing, President Dilma Rousseff will find it harder to spur higher growth without stoking faster inflation. Consumer prices rose 6.5 percent last year, a seven-year high, despite stagnant economic growth in the third quarter.
Rousseff's economic team is preparing more aggressive stimulus measures and tax breaks in her quest for faster growth, even if it means sacrificing some fiscal goals.
Last month, the number of Brazilians with jobs in the six major metropolitan areas surveyed remained stable in December from the month before and was unchanged from the year-ago period, IBGE said.
The tally of people who unsuccessfully looked for work fell 9.5 percent in December from November to 1.1 million. The figure fell 9.4 percent from a year earlier.
Real wages, or salaries discounted for inflation, rose 1.1 percent from the previous month to 1,650 reais ($948.28) and increased 2.6 percent from a year earlier.
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