Brazil created 19,282 new jobs last month, raising hopes that Latin America’s biggest economy is rebounding from the downturn caused largely by dwindling commodity prices. However, this was not enough to compensate for job losses that totaled 64,907 jobs in the first two months of the year, the worst performance since 2009.
Despite the hint of progress, the jobless rate rose to 6.2% from 5.9% the previous month, according to data released by the national statistics agency (IBGE). Moreover, the 19,282 new jobs pale in comparison with figures from the last decade, when Brazil used to create over 100,000 new jobs almost every month.
Farms and service sector firms have created the most employment opportunities, while manufacturers, retailers and construction companies continued to shed jobs.
Low growth and high inflation are wreaking havoc in Latin America’s biggest economy, with corruption scandals and political chaos hindering President Dilma Rousseff’s plans to reverse the country’s economy fortunes.
The South American country is continuously raising interest rates in a desperate attempt to push down inflation (Brazil’s central bank has raised the benchmark interest rate at four straight meetings to 12.75), but the high interest rates seem to have prevented businesses from expanding.
Meanwhile, the government is pushing Congress to help cut costs by trimming unemployment and pension benefits as part of the fiscal adjustment to shore up accounts. But with the Petrobras scandal creating a lot of heat politically, the government’s capacity to fix the economic problems is weakened.
In a central bank survey, economists have predicted further contraction in GDP growth.