UPDATE 1-Brazil posts surprise retail sales drop for May

martes 12 de julio de 2016 09:43 GYT
 

(Recasts with details, background)
    BRASILIA, July 12 (Reuters) - Retail sales in Brazil fell
unexpectedly in May as rising unemployment continued to hurt
consumption, government data showed on Tuesday, suggesting the
economy may take longer to hit bottom in its worst recession in
decades.
    Excluding cars and building materials, sales volumes fell a
seasonally adjusted 1.0 percent in May from April,
government statistics agency IBGE said. Economists polled by
Reuters had expected a 0.4 percent increase.
    Sales fell 9.0 percent from a year earlier,
compared with expectations for a 6.15 percent drop.
    Six of the eight sectors covered by IBGE posted declines,
with furniture and home appliance sales showing one of the
steepest drops at 1.3 percent. However, supermarket sales, which
account for about half of all consumption, remained unchanged
from April.
    A broader retail measure that includes automobiles and
building materials fell 0.4 percent from April and plunged 10.2
percent from May 2015, IBGE said.
    A recent improvement in consumer confidence had fueled hopes
that Brazil's economy could be nearing a turning point in its
severe recession. Although more than 11 million Brazilians are
unemployed, many consumers have felt more optimistic about the
future since the impeachment of President Dilma Rousseff in May
boosted Brazilian markets and strengthened the currency.
     GPA SA, Brazil's biggest retailer, on Tuesday
reported a 5 percent increase in net revenue for the second
quarter from a year earlier. 
    Brazil's economy is expected to shrink more than 3 percent
in 2016 for a second straight year. With interest rates at their
highest in almost a decade and inflation still well above the
government's target, growth is not expected to resume until the
fourth quarter or early 2017.
    Sales will probably remain weak in coming months as credit
continues to shrink, the labor marker worsens and confidence
improves only slowly, said José Francisco de Lima Gonçalves,
chief economist at Banco Fator in Sao Paulo. 

 (Reporting by Silvio Cascione; Editing by Lisa Von Ahn)