UPDATE 2-Brazil sheds jobs in October as economy feels recession's pinch

viernes 14 de noviembre de 2014 14:09 GYT

(Adds comments from labor minister, economist)

By Silvio Cascione

BRASILIA Nov 14 (Reuters) - Brazilian companies shed jobs in October for the first time in at least 15 years, revealing the delicate state of the economy ahead of potential tax hikes and government austerity.

Latin America's largest economy unexpectedly trimmed 30,283 net payroll jobs in October, Labor Ministry data showed on Friday, the worst reading for the month since the data series began in 1999.

The numbers point to a likely increase in the jobless rate, a potential blow to newly re-elected President Dilma Rousseff, who has pledged to shore up government finances and stem inflation without increasing unemployment.

The October job losses were widespread, but more common among builders and manufacturers. Retailers did not pick up the slack despite preparations for the holiday shopping season, hiring about half as many people as in the same month a year earlier.

Labor Minister Manoel Dias blamed the October election for the surprisingly weak numbers, suggesting companies might have put off hiring plans as they waited to see who would win the country's tighest presidential race in decades.

"We expect better results in November as we have news of many new building contracts and extensive hiring in construction," the minister said in an emailed statement.

But economists say Brazil is facing years of weak growth and have called for steep budget cuts, along with hikes in taxes and interest rates in order to prevent the government's debt load from rising further. Credit ratings agencies have warned of a potential downgrade next year, which could reduce capital inflows.   Continuación...