(Recasts with Labor Ministry data on July job growth)
By Silvio Cascione and Luciana Otoni
BRASILIA, Aug 21 (Reuters) - Job creation in Brazil slowed in July to its weakest pace for the month since 1999, another sign Latin America’s biggest economy might have slipped into recession during a tightly-contested presidential race.
Brazil’s economy created only 11,796 jobs in July, Labor Ministry data showed on Thursday, in line with market expectations in a Reuters poll.
But whether that will translate into a higher unemployment rate will not be known until days before the Oct. 5 vote, after a strike disrupted the collection of jobless data by statistics agency IBGE.
IBGE, which had been expected to release July’s jobless data on Thursday, said it will now take until Sept. 25 to process the unemployment rate for April through August because part of its staff had not come to work for nearly three months.
Signs of a recession have piled up in recent weeks, with job cuts in key sectors such as retail suggesting unemployment could rise from record lows - a potential blow to President Dilma Rousseff’s hope to be re-elected.
A spike in the unemployment rate is not certain, though, as weaker job creation has been accompanied by slower growth in Brazil’s workforce over the past few years. Teenagers and young adults have increasingly passed up jobs to dedicate more time to education and training, which could help keep the unemployment rate around the 4.9 percent recorded in April.
While Rousseff is in the lead, recent polls show she is unlikely to clinch more than 50 percent of the votes in the Oct. 5 election, forcing her into a runoff against the runner-up.
IBGE did release the jobless rate for a few major cities, showing a slight drop in the unemployment rate in Sao Paulo, to 4.9 percent from 5.1 percent in June, and an increase in Rio de Janeiro, to 3.6 percent in July from 3.2 percent in June.
The strike by IBGE workers ended last week and did not affect major surveys on inflation and gross domestic product.
The walkout was one of a wave of labor disputes that have hit industries and public services including banking, urban bus transport and the police this year. Last year, another strike at IBGE delayed the release of the June jobless rate. (Reporting by Silvio Cascione and Luciana Otoni; Additional reporting by Rodrigo Viga Gaier; Editing by Lisa Von Ahn, W Simon and Nick Zieminski)