By Stephanie Foden, Contributing Reporter
RIO DE JANEIRO, BRAZIL – Salaries in Brazil rose and the jobless rate went down to 5.3 percent in August from 5.6 percent last month, slightly below what economists were predicting. This is the second monthly drop and the lowest number this year so far, according to a survey released yesterday by the Instituto Brasileiro de Geografia e Estatística (IBGE – Brazilian Institute of Geography and Statistics).
With Brazilians keeping their jobs, good retail sales aided the economy avert a sharp downturn in July, according to Central Bank data earlier this month.
These are the best result since December 2012, when unemployment was at 4.6 percent. The average rate in the first eight months of the year has been 5.7 percent.
“These numbers points to an improvement in private consumption, which could offset at least part of the drop we expect for investments in the third quarter,” Enestor dos Santos, an economist covering Brazil with Banco Bilbao Vizcaya Argentaria S.A., in Madrid, Spain told Reuters.
“It may be too early to presage an increase in economic output in the third quarter. We still expect a drop. But this drop may be smaller than we predicted.”
There is more good news for the Brazilian workforce: the average income of workers in August climbed to R$1,883, reversing five months of consecutive falls. Real wages grew to 1.7 percent over July and 1.3 percent compared to August of last year.
The IBGE also reports that 23.2 million Brazilians in Rio de Janeiro, São Paulo, Salvador, Porto Alegre, Recife and Belo Horizonte have jobs, the same as July 2013 and 1.2 percent higher than August of last year. The number of people who failed to look for work dropped by six percent from July to 1.3 million.
The Brazilian government had made a concerted effort to jump start the economic recovery in the first half of the year with interest rate cuts, tax breaks and other incentives following last year’s meager GDP growth. However, a rise in inflation has led economists to lower their 2013 and 2014 GDP growth forecasts for Brazil to a little less than two percent.
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