July 31, 2018 / 12:48 PM / 4 months ago

UPDATE 1-Brazil's jobless rate drops to 12.4 pct in quarter through June

(Updates throughout with details from statement, context)

BRASILIA, July 31 (Reuters) - Brazil’s unemployment rate declined more than expected in the quarter ending in June, a sign that an underwhelming economic recovery is finally trickling down to workers.

The jobless rate fell to 12.4 percent from 13.1 percent in the three months through March, government statistics agency IBGE said on Tuesday. Economists polled by Reuters expected a median 12.6 percent rate.

Yet off-the-books employment accounted for nearly all gains, highlighting how the labor market bounceback still has a long way to go. Off-the-books workers do not enjoy paid holidays, scheduled pay raises and other worker benefits.

Formal employment, meanwhile, was nearly unchanged, keeping a lid on price pressures. Wages remained flat when adjusted for inflation, IBGE said.

This should allow the central bank to keep interest rates at an all-time low for a long time even after product shortages stemming from a nationwide truckers’ strike pushed up inflation.

A recent Reuters survey showed the strike had curbed the outlook for economic growth this year by nearly one percentage point, but only temporarily drove up prices. (Reporting by Bruno Federowski Editing by Bill Trott)

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