RIO DE JANEIRO—Brazil's unemployment rate rose for a second straight month in February as companies continued to dismiss workers they had hired for the busy year-end holiday season, although the still-tight labor market pushed salaries to a record high.
Unemployment climbed to 5.7% in February compared with 5.5% in January, the Brazilian Institute for Geography and Statistics, or IBGE, said Thursday.
That was the lowest unemployment rate recorded in the month of February under the IBGE's current methodology, which started in March 2002. The unemployment rate in February 2011 was 6.4%.
February's unemployment rate was less than the 5.9% median estimate from economists polled by the local Estado news agency.
Brazil typically sees a rise in the country's unemployment rate in the first quarter of each year as companies start to fire temporary workers hired for year-end positions, a process that is likely to continue through the end of March, said Cimar Azeredo, who coordinates the IBGE's unemployment survey.
"Unemployment rose in February as the elimination of temporary jobs went on," Mr. Azeredo told reporters. Brazil's unemployment rate likely would have been higher in February if not for the Carnival holiday, the researcher added.
The tourism and hotel industries, especially in Rio de Janeiro, typically keep temporary workers until after the Carnival holiday or through the busy summer season.
While the upswing in unemployment could help ease pressure in Brazil's already tight labor markets, wages continued climbing.
Tight labor markets and increased salaries have raised concerns about price pressures amid a cycle of interest rate cuts by Brazil's central bank.
Inflation ran at elevated levels throughout 2011 before ending the year at 6.5%, the ceiling of the government's target range of 4.5% plus or minus two percentage points.
Companies have had to boost wages to hire or retain workers, causing price increases throughout the economy as higher costs are passed along to consumers.
Meanwhile, workers have sought higher salaries to cash in on strong profits registered by companies as well as asking for compensation to cover price increases.
Average monthly salaries rose 1.2% in February to a record high 1,699.70 Brazilian reais ($932.67), up from 1,679.93 reais in January and 1,627.51 reais in February 2011, the IBGE said.
The Brazilian Central Bank has implemented five interest rate cuts since August, when it surprised financial markets by starting the easing cycle.
The benchmark Selic base interest rate currently stands at 9.75%. The bank has cited concerns about the impact of Europe's debt crisis and sluggish global economic growth on Brazil's economy in shifting its strategy toward easing.
Despite rising inflation expectations in recent weeks, the unemployment figures also indicate that growth in Latin America's largest economy may be accelerating after a sluggish 2011.
"The February survey has confirmed our call that the labor market remains heated, which may provide room to accelerate the GDP pace growth in coming quarters," Banco Santander said in a research report.
Meanwhile, the total number of employed Brazilians was slightly higher in February at 22.6 million, with the number of people with formal job contracts climbing to 11.2 million during the month.
The number of unemployed Brazilians inched 0.1% higher to 1.4 million.
wsj.com
Unemployment climbed to 5.7% in February compared with 5.5% in January, the Brazilian Institute for Geography and Statistics, or IBGE, said Thursday.
That was the lowest unemployment rate recorded in the month of February under the IBGE's current methodology, which started in March 2002. The unemployment rate in February 2011 was 6.4%.
February's unemployment rate was less than the 5.9% median estimate from economists polled by the local Estado news agency.
Brazil typically sees a rise in the country's unemployment rate in the first quarter of each year as companies start to fire temporary workers hired for year-end positions, a process that is likely to continue through the end of March, said Cimar Azeredo, who coordinates the IBGE's unemployment survey.
"Unemployment rose in February as the elimination of temporary jobs went on," Mr. Azeredo told reporters. Brazil's unemployment rate likely would have been higher in February if not for the Carnival holiday, the researcher added.
The tourism and hotel industries, especially in Rio de Janeiro, typically keep temporary workers until after the Carnival holiday or through the busy summer season.
While the upswing in unemployment could help ease pressure in Brazil's already tight labor markets, wages continued climbing.
Tight labor markets and increased salaries have raised concerns about price pressures amid a cycle of interest rate cuts by Brazil's central bank.
Inflation ran at elevated levels throughout 2011 before ending the year at 6.5%, the ceiling of the government's target range of 4.5% plus or minus two percentage points.
Companies have had to boost wages to hire or retain workers, causing price increases throughout the economy as higher costs are passed along to consumers.
Meanwhile, workers have sought higher salaries to cash in on strong profits registered by companies as well as asking for compensation to cover price increases.
Average monthly salaries rose 1.2% in February to a record high 1,699.70 Brazilian reais ($932.67), up from 1,679.93 reais in January and 1,627.51 reais in February 2011, the IBGE said.
The Brazilian Central Bank has implemented five interest rate cuts since August, when it surprised financial markets by starting the easing cycle.
The benchmark Selic base interest rate currently stands at 9.75%. The bank has cited concerns about the impact of Europe's debt crisis and sluggish global economic growth on Brazil's economy in shifting its strategy toward easing.
Despite rising inflation expectations in recent weeks, the unemployment figures also indicate that growth in Latin America's largest economy may be accelerating after a sluggish 2011.
"The February survey has confirmed our call that the labor market remains heated, which may provide room to accelerate the GDP pace growth in coming quarters," Banco Santander said in a research report.
Meanwhile, the total number of employed Brazilians was slightly higher in February at 22.6 million, with the number of people with formal job contracts climbing to 11.2 million during the month.
The number of unemployed Brazilians inched 0.1% higher to 1.4 million.
wsj.com
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