Brazil’s January Job Growth Was 3x Higher Than Forecasted, Surprising Economists

Brazil’s economy created nearly three times as many formal jobs in January as expected, defying recent economic indicators pointing to a slowdown.

According to data from the Labor Ministry released on Wednesday, Latin America’s largest economy created a net 137,303 formal jobs in January, far exceeding the 48,000 forecast in a Reuters poll of economists.

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The result was driven by the industrial sector, which alone created 70,428 jobs, surpassing the services sector, which traditionally holds the top spot as the largest job creator in the country.

Weak services sector, industrial output and retail sales figures for December had suggested an economic slowdown, which if confirmed could prompt the central bank to adopt a less aggressive stance to tame inflation.

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Policymakers have raised interest rates by 275 basis points since the start of a tightening cycle in September, bringing them to 13.25%, and have already signaled a 100 basis-point hike for the upcoming March policy meeting.

Economists surveyed by the central bank on a weekly basis project rates to end this year at 15%.

Despite the positive surprise in formal job creation, January’s result was lower than the 173,233 jobs added in the same month last year, according to the adjusted series.

(Reporting by Victor Borges, Writing by Marcela Ayres, Editing by Gabriel Araujo)

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