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Mercados

UPDATE 2-Brazil chalks up strongest job growth last year since 2013

(Adds labor secretary forecasts)

BRASILIA, Jan 24 (Reuters) - Brazil’s economy shed over 300,000 jobs in December, Economy Ministry figures showed on Friday, but 2019 marked the strongest annual job growth since 2013, a sign that the economy’s recovery from the last recession is finally picking up pace.

Seasonal patterns mean December is usually a month of job losses, and the decline of 307,311 jobs was slightly less than the median estimate in a Reuters poll of economists for a 320,000 fall.

Figures for the year show that Latin America’s largest economy created a net 644,079 jobs over the course of 2019, the first year of President Jair Bolsonaro’s right-wing administration, up over 20% from 529,445 the year before.

Bruno Dalcomo, labor secretary at the Economy Ministry, told journalists in Brasilia that job growth could hit the 1 million mark this year if the economy grows around 3%.

“If we are talking about 644,079 new jobs in 2019, it is very likely that we will reach 1 million new jobs this year if the economy grows around 3%,” Dalcomo said.

That is at the upper end of forecasts, with the government’s official growth outlook for this year at 2.4% and the market consensus at 2.1%, according to a Reuters poll of economists.

In seasonally adjusted terms, last year’s total was the highest since the 1.12 million recorded in 2013, just before the economy slid into the most savage recession on record, from which it is still struggling to fully recover.

The figures tie in with official data from the government statistics agency IBGE that showed the unemployment rate in the three months to November fell to 11.2%, the lowest since mid-2016. Earlier this year, it was as high as 12.7%.

“This is an important indicator of how economic activity continues to improve,” said Jason Vieira, chief economist at Infinity Asset Management in Sao Paulo, noting a sluggish first half of last year and better second half.

“There is momentum going into this year,” he said.

Still, the levels of underemployment and slack in the Brazilian labor market remain high, and many economists note that the decline in the unemployment rate will only be gradual. (Reporting by Gabriel Ponte, Marcela Ayres and Jamie McGeever; Editing by Alex Richardson, Chizu Nomiyama and Jonathan Oatis)

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