Unemployment falls to historic low of 4.7%

Brazil's unemployment rate fell for a third-consecutive month in December as year-end seasonal hiring brought joblessness in Latin America's largest economy to record lows for the month and year.

Unemployment was 4.7% in December compared with 5.2% in November, the Brazilian Census Bureau (IBGE) said Thursday. That was the lowest unemployment rate ever recorded under the IBGE's current methodology, which started in March 2002. The unemployment rate in December 2010 was 5.3%. 
   
Brazil's average unemployment rate for 2011 also fell to a record low of 6.0%, down from 6.7% in 2010, the IBGE said.
   
The continued decline in unemployment could further squeeze already tight labor markets in Brazil, raising concerns about price pressures amid a cycle of interest rate cuts by the Brazilian Central Bank. Inflation ran at elevated levels throughout 2011 before ending the year at 6.5%, the ceiling of the government's target range of 4.5% plus or minus two percentage points.
   
Companies have had to boost wages to hire or retain workers, causing price increases throughout the economy as higher costs are passed along to consumers. Meanwhile, workers have sought higher salaries to cash in on strong profits registered by companies as well as asking for compensation to cover price increases.