Brazil’s Economy Cools Down After 9% Annual Rate Expansion

São Paulo street For the third month in a row Brazil has reported in July slower job creation, reflecting the slowdown of the economy in the second quarter after a massive 9% year-on-year growth in the first quarter of the year. Traders say this increases the likelihood central bank policy makers may leave interest rates unchanged in their next meeting. 

The Ministry of Labor said that the Brazilian economy added 181,796 government registered jobs last month, the smallest number since January. Job creation figures show companies are adjusting their payrolls more cautiously after strong hiring in the beginning of the year, Labor Minister Carlos Lupi said in Brasília.

“The job market grew a lot in the first months, now it is adjusting its pace,” Lupi said. “As we expect inflation to remain under control we don’t see the need for further interest rate increases.”

The government-registered job creation number is a balance of posts created minus jobs eliminated. Registered jobs assure employees benefits such as unemployment insurance and retirement payments by the government. The economy created 212,952 registered jobs in June and 298,041 in May.

Brazil has added jobs every month of this year as the economy expanded at a 9% annual rate in the first quarter, the fastest pace in 15 years. Last year, Brazil generated almost a million registered jobs.

Traders are reducing bets on rate increases after central bank president Henrique Meirelles said August 16 that inflation expectations are “around” the central bank’s target rate of 4.5% for next year, fueling speculation that policy makers will stop raising borrowing costs.

Annual inflation slowed to 4.6 percent in July, the lowest level in six months.

Economists’ median growth forecasts have fallen to 7.09% for 2010, down from 7.2% four weeks previously, according to a central bank survey of about 100 economists. The central bank raised the benchmark lending rate, known as the Selic, by a half-point to 10.75% in July.

MP

Tags:

You May Also Like

Seven Brazilian Companies Among World’s Top 500

Seven Brazilian companies appeared among the 500 largest open capital companies in the world, ...

Fear of US Recession Lowers Brazil’s Growth Expectation from 4% to 3.5%

The latest estimate from Brazil’s Central Bank (BC) sees Brazil growing 3.5% this year ...

Bono Waxes Enthusiastic About Brazil Lula’s Battle on Poverty

U2 Irish rock band leader and social activist Bono met privately on Sunday, February ...

The World’s Best Arab Eatery Is Hidden in the Brazilian Jungle

Nobody would believe it if it was said that the best Arab restaurant in ...

Brazil’s Gol Joins Amadeus System for Global Ticketing

Brazilian Airline Gol and Amadeus, a company specialized in travel and tourism market, have ...

Young woman gets a cervical cancer vaccine shot

After 5 Years Cervical Cancer Vaccine Tested in Brazil and US Keeps Working

As the first FDA-approved cancer vaccine, designed to protect against human papillomavirus, has moved ...

‘Be Patient,’ Lula Asks Brazil

"The art of government is the art of patience. We do not have the ...

Only 14% of Brazilian Women Hold Executive Positions

In Brazil, women stay in school longer and are financially responsible for an increasing ...

With 150,000 Illegals from Brazil, UK Decides to Impose Visas for Brazilians

A global economy but not so much of a global understanding, at least when ...

IDB to Hold Its Next Annual Assembly in Brazil

Brazilian President Luiz Inácio Lula da Silva received the president of the Inter-American Development ...