July 25, 2019 / 1:51 PM / 2 months ago

UPDATE 1-Brazil job growth rises more than expected in June

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By Marcela Ayres and Jamie McGeever

BRASILIA, July 25 (Reuters) - Job growth in Brazil accelerated in June, the Economy Ministry said on Thursday, marking the third month in a row of net employment gains and suggesting the labor market and economy are improving.

The economy added a net 48,436 jobs last month, more than the 34,000 median estimate of a Reuters poll of economists and May’s 32,140. It was also the best figure for the month of June since 2013.

Brazil’s economy has now delivered net job growth for three consecutive months for the first time this year, encouraging optimism among market participants that the huge slack in the labor market may be starting to tighten, however slowly.

The widely held consensus, shared by the government, central bank, International Monetary Fund and market participants, is that Brazil’s economy will grow by only 0.8% this year. That would be below the 1.1% of the last two years, which themselves were considered sub-par.

The unemployment rate remained high at 12.3% in the three months to May, but has been drifting lower from 12.5% in the three months to April and 12.7% in the three months to March.

That said, the balance for the first six months of the year makes for more sober reading. A net 408,500 jobs were created in the January-June period, up only 4% from 392,461 in the same period last year, Economy Ministry data on Thursday showed.

Some 13 million Brazilians remained out of work, and the underemployment rate stood at a record 25% with a record 28.5 million people underemployed. The number of people who have left the workforce altogether stood at a historic high of around 4.9 million, or 4.4% of the working population.

Reporting by Marcela Ayres Writing by Jamie McGeever Editing by Nick Zieminski and Bernadette Baum

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