São PAULO-Brazil's unemployment rate fell below 6% in November, underlines the strong recovery of the Brazilian economy of global crisis, but fresh call for higher interest rates to tame inflation calls.
Unemployment was 5.7% 6.1%, the Brazilian Census Bureau or IBGE, last month, lower than from October said Friday. October's rate was recorded the previous low for unemployment among the IBGE's current methodology. Unemployment in November 2009 was 7.4%.
Official jobs data measure only part Brazilian economy, covering six metropolitan regions and nearly 24 million "economically active" people about a quarter of the entire workforce of Brazil.
Nevertheless, unemployment has fallen for six consecutive months and the figures present a clear picture of the demand for labor exceeds supply. Brazil's economy is roaring, with gross domestic product more than 7.5% this year, reversal of the previous year grow 0.6% contraction.
Low unemployment, although a sign of a growing economy is a "significant and increasing risk" Government inflation target, said Luiza Rodrigues, an economist at Banco Santander, in a research note. Mrs Rodrigues is currently as early "as January" prices in check hold the Central Bank, raising its Selic base rate., 10.75%.
Mrs Rodrigues said falling unemployment numbers mean "is probably that workers here are for more salary adjustments to questions, and in view of the tight labour market are likely to succeed;" "More inflation comes."
Consumer price inflation pushes 2010 target of 4.5% and orthodox economists are 6% on the Government say the jobs numbers to add concerns about the pressure on prices. But the Central Bank has been reluctant to raise interest rates and is now waiting for the effects of the measures which it slowly took Bank loans earlier in this month.
RBS said economist Zeina Latif jobs data "Guarantees rapid response of the Government". She said cutting expenditure and surrender to the raising of minimum wages faster than inflation means.
Minutes from the Central Bank latest rate setting meet published Thursday, were ambiguous that left field wide open for the incoming Central Bank President, Alexandre Tombini, its own course. Mr Tombini will acquire established Henrique Meirelles in January.
Not everyone believes, will move higher interest rates. Some votes in both the Government and the companies argue that higher prices exaggerate more speculative investment in Brazilian debt, attract the strong appreciation of the Brazilian real. Brazil sky high numbers are irresistible close to zero with prices in most of the developed world.
Compensates for the real lost ground against the dollar on Friday as the worry about the State of European finance inflation concerns in Brazil. That was real BRL1. 7135 per dollar, weaker than Wednesday's close the BRL1. 702 trade.
Much depends on whether President Dilma Rousseff who Jan. 1 Office expenditure cuts, as you suggested. If held is, then some economists have argued there may be room for Brazil stable or even lowered interest rates.
Write toMatthew Cowley matthew.cowley@dowjones.com
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